A reservation agreement is the short pre-contract document by which a Slovak site is taken off the market while the parties prepare the real contract, and Slovak law does not define it as a contract type at all. Whether it obliges anyone to conclude anything depends on three requirements in section 289 of the Commercial Code. Whether the fee attached to it is recoverable, capped or reducible depends on whether it was drafted as a contractual penalty. And whatever it says, it binds the counterparty rather than the plot.
What a reservation agreement is in Slovak law
It is an unnamed contract. The Civil Code allows the parties in section 51 to conclude a contract that is not separately regulated, provided it does not conflict with the content or the purpose of the Code, and the document usually headed rezervacna zmluva lives entirely in that space. There is no statutory chapter for it, no list of mandatory contents, and no default rule to fill a gap the parties left open. A court reading it afterwards is not reading a recognised type; it is reading the clauses.
That makes the heading almost meaningless as a guide to what has been agreed. Two documents with the same title can sit on opposite sides of the only line that matters. One is a genuine agreement to conclude a future contract, an instrument the law does regulate. The other is a promise not to market the property for a period, backed by a fee and nothing else. What turns on that difference, and how a court reads it afterwards, is worked through in our post on what a reservation agreement actually binds.
The regulated instrument comes in two versions. Section 50a of the Civil Code governs it between ordinary parties and requires the essential elements of the future contract to be agreed. Section 289 of the Commercial Code governs it between businesses, which is where an industrial letting or a plot purchase will normally sit, and asks for less on content but is the version whose remedies bite hardest.
The three requirements that make it binding
Section 289 of the Commercial Code sets out three, and all three must be present. The agreement must bind one or both parties to conclude the future contract within a determined period. The subject of performance must be determined at least in a general way. And the agreement requires written form. Miss any one of them and no obligation to conclude anything has come into existence, whatever the document is called and whatever has been paid.
Meet all three and the position changes in kind rather than in degree. Under section 290 the bound party must conclude the contract without undue delay once the entitled party calls on it to do so. If it does not, the entitled party may demand that the content of the contract be determined by a court, or by a person named in the agreement, or may claim damages for the breach. Damages alongside the determination of content are available only where the bound party unjustifiably refused to negotiate at all.
The distinction between those two remedies is the commercial heart of the instrument. Damages are compensation for a site that went to somebody else. A determination of content is the site. An occupier that has a properly drafted future-contract agreement and a counterparty that changes its mind is not negotiating from a position of loss; it is holding a route to the asset itself.
The two clocks: the call and the year
The first clock runs from signature and is easy to miss. Section 292 provides that the obligation to conclude the future contract ceases if the entitled party does not call on the bound party to perform it within the time determined in the agreement. No notice is required, no dispute arises, and there is nothing to remedy afterwards. A generous-looking window and a party that lets it pass is a reservation that expired in silence.
The second clock starts when the call is made. The right to have the content determined by a court, and the damages claim that goes with it, become time-barred one year from the day the entitled party called on the other side to conclude the contract. The parties may agree a different period, but it may not exceed the general limitation period of the Commercial Code. One year from the call, not from the signature and not from the refusal, which is why the date of the call is worth recording in writing.
There is a third way out, and reservation documents rarely close it. The obligation also ceases where the circumstances the parties evidently proceeded from have changed so far that the bound party cannot reasonably be required to conclude the contract. That release is conditional: it operates only where the bound party notified the change to the other side without undue delay. A seller who goes quiet for a month and then invokes changed circumstances has missed the condition.
What the reservation fee is, legally
Three different things travel under the same name, and the drafting decides which one is on the table. The first is a contractual penalty. Under section 544 of the Civil Code a penalty may be agreed only in writing, and the arrangement must state either the amount or the method of determining it. Its attraction is that it is payable even where the innocent party suffered no loss at all.
Two rules cut the other way, and both surprise occupiers. The creditor may not claim damages caused by the breach the penalty covers unless the parties agreed otherwise, and may claim damages exceeding the penalty only where that too has been agreed. A penalty clause therefore usually operates as a ceiling on recovery rather than a floor. And section 545a lets a court reduce a disproportionately high penalty, having regard to the value and significance of the obligation it secures. A large fee negotiated as the only remedy is a number a court may later shrink.
The second thing the payment can be is a deposit credited against the purchase price or the first rent, in which case none of the above applies and the document has to say what happens to the money in each of the three endings: the deal completes, the buyer walks, the seller walks. The third is an agent’s commission held on account, which is not a remedy against the seller at all. Where the agreement is silent about the seller walking away, it is usually silent because that ending was never meant to cost the seller anything.
Why a reservation does not attach to the land
Because it creates an obligation between two parties and nothing more. It is not entered in the cadastre of real estate, it is not visible to anyone searching the title, and it does not survive a sale to a third party. The Civil Code states the same principle for a pre-emption right in its ordinary form: it imposes a duty only on the person who promised to offer the thing for sale. Where that person sells in breach, the entitled party is left with claims against the promisor.
Slovak law does offer an instrument that reaches the land, and the difference is worth an afternoon of anyone’s time. A pre-emption right may also be agreed as a right in rem which acts against the successors of the buyer. It must be in writing and it is acquired by entry into the cadastre. Where no period is agreed for the sale, the entitled person has two months after the offer to pay for immovable property, and the right lapses if that period passes unused.
The same registration logic governs ownership itself: title to immovable property passes by entry into the cadastre rather than by signature on the purchase contract. Between a signed reservation and a registered title there are therefore two distinct gaps, and only one of them can be closed by a document that binds a person.
Frequently Asked Questions
Is a reservation agreement legally binding in Slovakia?
It depends entirely on its clauses. If it meets the three requirements of section 289 of the Commercial Code, written form, a determined period and a subject of performance determined at least generally, it binds the parties to conclude the future contract and a court can determine that contract’s content. If it misses one, nobody is obliged to conclude anything.
Is a reservation agreement the same as heads of terms?
No, and they sit at different points in the sequence. Heads of terms summarise the commercial position once the parties are already negotiating exclusively, and are usually expressed as non-binding apart from confidentiality and exclusivity clauses. A reservation agreement is the step that creates the exclusivity in the first place, and it may or may not create a duty to conclude.
Can the seller keep the reservation fee if the buyer walks away?
Where the fee is drafted as a contractual penalty, yes, and it is payable even if the seller suffered no loss. Where it is a deposit or a commission held on account, the answer is whatever the document says, which is why the three possible endings should each be addressed explicitly rather than left to be argued about later.
Does the reservation appear in the cadastre?
No. It binds the counterparty, not the plot, and a third party who buys the land takes it free of the promise. The instrument that does reach successors is a pre-emption right agreed as a right in rem, which requires written form and entry into the cadastre.
How long does a reservation agreement last?
For the period the parties set, and the period does real work. If the entitled party does not call on the other side to conclude within it, the obligation ceases without any further step. Once the call is made, the court remedy and the damages claim become time-barred one year later unless a different and no longer period was agreed.
Have you been asked to sign a reservation before you have seen the lease or the purchase contract? Send us the document and we will tell you in one page whether it obliges anybody to conclude anything, what happens if the other side walks away, and whether the fee you are paying is a penalty, a deposit or a commission.