Freedom of Contract and Its Limits
A security services contract is built on the principle of freedom of contract established by the Civil Code: subjects of private law may, within the limits of the law, freely conclude contracts and determine their content; they may even conclude contracts that are not provided for by law but do not contradict it. This means that the form and conditions of a security services contract are left to the agreement of the parties, unless the validity of the contract, for the protection of the essential interests of society or the person, depends on a state permit — such a case must be regulated by a separate law.
Freedom also has limits: where one party to the contract occupies a dominant position in the market, it bears, in that field of activity, the obligation to conclude contracts and may not groundlessly offer the counterparty unequal conditions. Likewise, persons who acquire or use services for non-entrepreneurial purposes or to satisfy vital needs may not be unreasonably refused a contract where the other party acts within its entrepreneurial activity. For the security market these rules mark the boundary between commercial freedom and abuse of a stronger position.
The Concept of the Contract of Mandate
Security services contracts often rest on the model of the contract of mandate: under a mandate, the mandatary is obliged to perform one or several acts entrusted to him in the name and at the expense of the mandator. In the security sphere this construction means that the service provider acts in the name of and at the expense of the client, and precisely this connection must be reflected in the content of the contract: which acts are entrusted, in whose name they are carried out, and who finances them. A clearly defined mandate prevents disputes about the scope of the services and about who bears the costs of particular actions.
Termination of the Contract
A contract of mandate may be terminated by the parties at any time, and an agreement to waive this right is void — a guarantee equally important for security contracts, since the performance of the obligations rests on the trust between the parties. Where the mandatary terminated the contract at a time when the mandator was deprived of the possibility of securing his interests otherwise, the mandatary must compensate the damage caused by the termination, unless he had a significant ground for it. Where the mandator terminates, he must reimburse the mandatary all necessary expenses incurred in performing the mandated act, and, if the contract was for remuneration, pay the fee in proportion to the work performed. These rules give both parties a lawful exit while protecting the counterpart from unjustified loss.