How to create a legally binding contract in Croatia

How to create a contract
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UPDATED: 28.5.2024.

There are various circumstances in which you may need a contract in Croatia, including renting an apartment or getting a new job. If you plan to use a contract as an agreement with someone or a business, it is important that all the rules are followed to be binding in court if there is ever a dispute.

While a contract is not required by law in most situations, sometimes it is best practice to avoid problems down the line. The rules that define Croatian contracts are generally a bit informal, but if you don’t do it right, a lack of attention can produce one hell of a mess to deal with in court.

In this post, we cover:

The facts are these…

When might you need a contract in Croatia?

A contract should be used whenever two or more parties agree to specific terms. Some situations when you might need a contract in Croatia include:

  • Renting a property – view a guide here
  • Purchasing a property – view a guide here
  • Employing someone – view a guide here
  • Getting a job – view a guide here
  • Freelancing for a company – view a guide here
  • Hiring a freelancer – view a guide here
  • Last wills and testament – view a guide here
  • Getting a loan – view a guide here

Forms of contract agreements in Croatia

There are two contract forms in Croatia:

  • Verbal contract
  • Written contract

Verbal contracts

Verbal contracts are considered to be binding in the eyes of the Croatian courts. However, if there is a dispute about the verbal contract, the burden will be on you to prove that the contract exists. Verbal contracts, while binding, can be difficult to prove if disputed.

A verbal contract can be proven in court using:

  • Witness testimony
  • Text messages
  • Emails
  • Any other means of proving facts recognized by law

An initial contract of employment can be verbal. However, the employer must provide the employee with a written contract or a written confirmation that includes the essential elements within 8 days of the verbal agreement.

[Read: Types of employment contracts in Croatia]

A last will and testament can be communicated verbally in extreme circumstances. After the extreme circumstances have passed, the person must put the will in writing within 30 days. If the last will is communicated on a deathbed to a witness, then the verbal will is binding.

Written contracts

Written contracts are the preferred method as they are much easier to prove and also ensure that the terms are clear to both parties.

Written contracts are required for:

  • Rentals
  • Leases
  • Property purchases
  • Building agreements
  • Loans

Required and essential elements of a binding contract in Croatia

Several elements should be a part of a valid contract. Some are required by law for all contracts, and some are not required by law but could prove essential depending on the situation. What is the difference?

A required element is something you must have for the contract to be valid. An essential element is something that is not required by law but is needed because the parties deem it so.

Required elements of contracts

The required elements for a Croatian contract include:

  • Name of each party
  • OIB of each party – view a guide here
  • Registered address of each party – view a guide here
  • Substance pertaining to the subject of the agreement
  • Croatian language
  • Amounts in euros

Substance

The required “substance” varies depending on the purpose of the contract. For example, if you are renting an apartment, then there is specific information that must be included, like the address of the apartment and the cost of the rental.

If you are leasing office space from the government, then there are additional rules that you must follow. If you are employing a person, their salary and term of employment must be defined.

Croatian language

Written contracts must be in the Croatian language to be valid within Croatia. You may write a contract in both English and Croatian. However, only the Croatian language will be considered binding, given that it meets all other rules of validity.

Money

If the contract defines any amount of money, like the cost of rent or a purchase price, the amounts must be in euros (EUR), which is the official currency in Croatia.

A contract can include a provision that calculates the value of obligations in Croatian currency based on the price of gold or the exchange rate of a foreign currency. In such cases, the payment is made in Croatian currency using the Hrvatska narodna banka (Croatian National Bank) selling rate on the payment day.

[Read: Croatian transition from kuna to euro: Guide for residents of Croatia]

Essential elements of contracts

Elements that are considered essential, but not required, for a Croatian contract, include:

  • Date
  • Place where a contract was signed
  • Signature of parties
  • Deadline
  • Conditions

Date

It may seem odd that having the date is not required on a contract, but that doesn’t mean you shouldn’t have one anyway.

Place

It is very common to include the place of execution, even though it is not required. For example, if the contract is signed in Split, you would write above the signature u Splitu (in Split).

Signatures

It is shocking that party signatures are not a required element. They are definitely essential, and leaving them off is not recommended as they serve as proof of acceptance.

Condition

The conditions define what each party must do as part of the contract or on which factors the execution of the contract depends.

When is a notary public required in Croatia?

In Croatia, a notary public is called javni bilježnik. A notary provides a variety of services, but for this post, we will focus on notarizing as it pertains to contracts.

[Read: How to get something notarized in Croatia]

There are two types of notarization of an agreement:

  • Notarized signature
  • Solemnizacija

Notarized signature

A notarized signature is when a notary public watches someone sign a document and checks their signature against their government identification.

Having a contract notarized validates the signatures on the document. If a contract is in dispute, having a contract notarized only provides value if there is a claim that the signature isn’t real. If the terms or the notion of free will are in dispute, whether or not the signatures are notarized is irrelevant.

Most contracts do not require a notarized signature validated by a javni bilježnik, but some do. The circumstances when you definitely need a notarized signature include:

  • Property purchase (under certain circumstances)
  • Apartment rental (under certain circumstances)
  • When requested by a specific government agency

We’ll now go through each situation in detail on why a notary is needed.

Property purchase

In a straight-up property purchase, you do not need a notarized contract. However, if you wish to register your property purchase in the land registry, you will need a notarized written contract to do so.

A certificate from the land registry is the only proof of ownership. This means that even though the law does not require a notary, the government does, so you still need it in practice.

[Read: How to buy residential real estate in Croatia]

Apartment rental

To rent an apartment in Croatia, you must have a written contract by law. However, it is common that when a Croatian is renting to another Croatian, they forgo a written contract and stick with a verbal one. This happens for a variety of reasons.

Younger people may rent an apartment while they are at university but continue to use their parent’s address as their primary address on file with the police. Croatian landlords can avoid paying taxes on their rental income if there is no contract in place and the tenant pays in cash. It should be noted that this is not legal, but it is done.

[Read: How to find an apartment or house to rent in Croatia]

Foreigners do not have the same luxury. Foreigners who live in Croatia on a temporary or permanent residency permit need to have a written contract at a minimum, but a notarized contract is better.

When you visit the police station to register your new address, you must present your rental contract. In addition, the landlord must accompany you to the MUP station if the contract is not notarized to validate ownership of the property and that they are indeed renting to you per the terms in the rental contract. If the contract is notarized, then you can register the address on your own without the landlord present.

In addition, having a written contract when renting an apartment prevents the landlord from taking advantage of you. They may take advantage of you anyway, but at least you have recourse if it’s all written down and notarized.

[Read: Your right as a renter in Croatia]

When requested by a specific government agency

Some government agencies, like the land registry, will require a notarized contract. In these cases, the relevant agency will tell you.

Solemnizacija

Solemnizacija (solemnization), also referred to as javnobilježnički akt, is a special form of notarization. It’s a method that addresses the substance of the contract, not just the signatures. Through this process, the notary guarantees the content and all essential elements of the contract.

The process of solemnization includes:

  • Reading the contract out loud in front of all contract parties and the notary
  • Each party agrees that everything in the contract is valid and binding
  • Each party agrees that they understand the consequences of the contract terms
  • Each party agrees that they have free will to sign the contract
  • Each party signs the contract in front of the notary along with the provided identification

Solemnizacija is required for very few contracts. It is a more expensive notarization because it takes longer, and the notary’s responsibility is bigger. This process can also be done by the court instead of by a notary at a cheaper cost, but the wait time to get into court can be significant.

Solemnizacija is required for lifelong support contracts. A lifelong support contract is typically used to supersede default inheritance after death, even though that is not its intended purpose by law. A lifelong support contract can state that one party is obligated to support the other until their death in exchange for compensation, usually a property.

Learn more about the solemnization of contracts in this post.

Writing a valid last will and testament in Croatia

There is a lot to know about writing a last will and testament that is valid in Croatia. Let’s now focus on what makes a will binding in Croatian court.

A last will can be binding if:

  • Communicated verbally in extreme circumstances
  • Written personally by hand
  • Computerized with witnesses
  • Computerized with solemnizacija performed with a notary, in which case witnesses are not needed

Now, we’ll go through each situation.

Communicated in extreme circumstances

As already noted above, a last will and testament can be given verbally in extreme circumstances in front of two witnesses at the same time. After the extreme situation is over, the person must create a written version within 30 days. If the last will is communicated on a deathbed, then the verbal will is binding.

Written personally by hand

A last will is considered binding if it is written in their own hand and signed. Witnesses are not needed in this situation.

Computerized with witnesses

A will is also considered valid if it is typed and signed by both the testator (the person whose will it is) and at least two witnesses who gain no benefit from the will.

Computerized with solemnizacija

A typed will can be validated without witnesses if it is confirmed using solemnizacija process with javni bilježnik.

Other things to know about wills

Once a will is produced, it can be added to the Croatian register of wills. This is not required but is recommended as it adds an extra layer of insurance that your will is not disputed after death.

Wills are never notarized. If you make a private will without a notary, then it is your responsibility to send it to the register. If you make a will before a notary using solemnizacija, then they will send it to the registry on your behalf.

How to get help with a contract in Croatia

If you need help writing a contract or need a legal expert to review an existing contract, the Expat in Croatia lawyer network can help. You can view the expat-vetted lawyer network here.

We have expat-vetted lawyers with which we collaborate across Croatia who can write or review your contracts to ensure:

  • All your questions are answered
  • The contract is binding and enforceable
  • You are not taken advantage of
  • Required substance articles are included
  • There are no strange or unnecessary terms added by the other party

They can also visit a notary or party to the agreement with you to coordinate and translate on your behalf. To get help with a contract, contact us using the below form:

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View our other related articles

Frequently asked questions

Can anyone make a binding contract in Croatia?

To enter into a legally binding contract in Croatia, individuals must be 18 or older. They must also have the mental capacity to understand the terms and implications of the contract.

What are the requirements for a binding contract in Croatia?

For a contract to be legally binding in Croatia, it must include an offer and acceptance, which is a clear proposal by one party and an agreement by the other.

How do you make a legally binding contract in Croatia?

  • To make a legally binding contract in Croatia, you need to follow several key steps:
  • Identify the parties involved by clearly stating their names and addresses
  • Ensure there is an offer from one party and acceptance by the other
  • Both parties must agree to exchange something of value, which is known as consideration
  • Both parties give their mutual consent, meaning they agree to the contract terms willingly and without coercion
  • Contract must also have a legal purpose, which means it can’t be for something illegal or against public policy
  • Parties involved must have the capacity to contract, meaning they are of legal age and sound mind

What 4 elements are needed to make a legally binding contract in Croatia?

The four essential elements of a legally binding contract are offer, acceptance, consideration, and mutual consent. An offer is a proposal made by one party. Acceptance is when the other party agrees to the offer. Consideration refers to something of value exchanged between the parties. Mutual consent means both parties must agree to the contract terms and intend to be bound by them.

Can I write my own contract in Croatia?

Yes, you can write your own contract. However, it’s important to ensure that it includes all the necessary elements to be legally binding and that the terms are clear. While you can draft it yourself, consulting a legal professional is advisable to avoid any potential issues.


Sources:

Zakon o obveznim odnosima
Zakon o javnom bilježništvu
Will by e-Građani

Please note: Information provided by Expat in Croatia is only for the purposes of guidance. It does not constitute legal or financial advice in any form. Croatian laws and bureaucratic rules often change, and each personal case is individual, so different rules may apply. For legal advice, contact us to consult with a licensed Croatian lawyer. For financial advice, contact us to consult with a licensed Croatian tax advisor or accountant.

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