General rules for making a contract in Armenia

1) What mandatory elements must a contract between two residents contain?

Depending on the type of agreement concluded between the parties, the essential terms of the contract may vary; however, they generally include the subject matter of the contract, the price, and the term.

2) Is notarization or state registration required for B2B contracts?

Notarization or state registration is generally not required for B2B contracts, unless a specific type of agreement is expressly subject to such requirements by law (for example, real estate transactions, lease contracts). In most cases, a written contract signed by both parties is sufficient to make it legally binding.

3) What are the general requirements for the form and language of a contract between residents?

The contract may be concluded either orally or in writing (in simple written or notarial form). As for the language, there is no legal requirement for the contract to be concluded in Armenian; however, from the perspective of tax audits and other practical matters, contracts are usually concluded in Armenian and may be accompanied by versions in other languages.

4) What are the consequences of non-compliance with the written form of a contract?

Failure to comply with the simple written form of a transaction deprives the parties, in the event of a dispute, of the right to invoke witness testimony to confirm the transaction and its terms; however, it does not deprive them of the right to present written or other evidence.In cases expressly provided by law or agreed upon by the parties, failure to comply with the simple written form of a transaction renders it invalid.

5) What specific rules apply when contracting with public authorities or state customers?

When the other party of the contract is the State, represented by a public authority, the contract must mandatorily be concluded in Armenian, and it may also be accompanied by versions in other languages.

6) What are the requirements for performance and modification of contracts?

Amendment of the contract is possible by agreement of the parties, unless otherwise provided by law or the contract.

The contract, at the request of one of the parties, may be amended by a court decision only in the event of a material breach of the contract by the other party or in other cases provided by law or the contract.

A material breach of the contract by one of the parties is recognized as one that results in such damage to the other party that it significantly deprives the latter of what it had the right to expect when concluding the contract.

In the event of a unilateral refusal to perform the contract in full or in part, when refusal from the contract is permitted by law or by agreement of the parties, the contract shall be deemed terminated or amended accordingly.

The agreement to amend the contract shall be concluded in the manner in which the contract was concluded, unless otherwise provided by law, other legal acts, a contract, or commercial practices.

7) What are the requirements regarding currency and payments in contracts with non-residents?

The amount specified in the contract may be stated in foreign currency, however, its equivalent in Armenian dram (AMD) shall be calculated based on the official exchange rate of the Central Bank of the Republic of Armenia at the relevant date. Accordingly, the Parties agree that all invoices and payments under the contract shall be made based on the AMD equivalent calculated accordingly.

8) Can foreign law be chosen to govern a contract and what are the restrictions?

Under Armenian law, parties are free to select the law that will govern their contract, including foreign law. This is especially common in international commercial contracts where parties are from different jurisdictions. This principle is recognized under Armenian Civil Code and aligns with international private law standards.

9) What are the requirements for registration and reporting of cross-border contracts?

In Armenia, there are no legal requirements for the registration or reporting of cross-border contracts.

This means that:

• Parties are generally free to enter into contracts with foreign entities without needing to register the agreement with any Armenian state authority;
• There is no mandatory reporting of the contract itself to the government;
• Exceptions may exist only for specific types of transactions, such as foreign investments requiring approval, financial transactions subject to Central Bank regulations, or contracts involving immovable property located in Armenia but ordinary commercial or service contracts with non-residents do not require registration or reporting.

Author: Meri Artashesyan