Civil law. A special part. Commercial concession agreement (most important)

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Civil law. A special part. Commercial concession agreement (most important)

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Topic 13. COMMERCIAL CONCESSION AGREEMENT

The contract of commercial concession (franchising) is new for our civil law. Franchising is understood as the paid acquisition by one entrepreneur (user) from another entrepreneur, usually from a commercial organization with an established business reputation (copyright holder) well known to consumers, the right to use his means of individualization of goods produced, work performed or services provided, as well as a protected commercial information (know-how) on the technology of the relevant production and provision of consulting and other organizational assistance so that the goods, works and services of the user appear on the market in the same form as similar goods, works and services of the right holder. Thus, the entrepreneur-user in relations with his counterparties-consumers acts under the guise of a copyright holder, using his attributes, which have long established themselves in the market of relevant goods or services, to formalize the results of their activities.

In view of the expansion of the scope of franchising, the importance of protecting the interests of the consumer (service recipient), who must be provided with goods or services of the same quality as those produced or provided by the original copyright holder, is increasing.

Under a commercial concession agreement, one party (right holder) undertakes to grant the other party (user) for a fee for a period or without specifying a period, the right to use in the user's business activities a set of exclusive rights belonging to the right holder (paragraph 1 of article 1027 of the Civil Code).

By its legal nature, this agreement is consensual, reimbursable, bilateral.

It should be noted that the specified agreement should be used exclusively in the field of entrepreneurial activity, in connection with which only commercial organizations and individual entrepreneurs can be its parties (clause 3 of article 1027 of the Civil Code). Accordingly, the special rules of the Civil Code on obligations in carrying out entrepreneurial activities are applicable to relations between its participants. According to the norm of paragraph 4 of Art. 1027 of the Civil Code, the rules of Sec. VII GK on the license agreement, if it does not contradict the provisions of Ch. 54 of the Civil Code and the essence of the commercial concession agreement.

The subject of a commercial concession agreement is, firstly, a set of exclusive rights belonging to the right holder and individualizing either him (the right to a commercial designation) or the goods produced by him, the work performed or the services provided (the right to a trademark or service mark). Secondly, the subject of such an agreement is the possibility of using a production secret (know-how) protected by the copyright holder, as well as his business reputation and commercial experience, including in the form of various documentation on organizing and conducting business activities. Thirdly, in the composition of the subject of the concession agreement in accordance with paragraph 1 of Art. 1031 of the Civil Code includes instructing the user and his employees on all issues related to the exercise of the rights transferred to him by the copyright holder.

The concession agreement must be concluded in writing, otherwise it is considered void (paragraph 1 of article 1028 of the Civil Code). In addition, the concession agreement is subject to state registration with the federal executive body for intellectual property (Rospatent) on pain of declaring it null and void.

The concession agreement must contain specific conditions for determining and paying remuneration to the right holder. The law allows for various forms of such remuneration: one-time (lump-sum) or periodic (royalties) payments, deductions from proceeds, a mark-up on the wholesale price of goods transferred by the right holder for resale, etc. (Article 1030 of the Civil Code).

As a party to the concession agreement, the right holder is obliged (clause 1 of article 1031 of the Civil Code):

▪ issue the licenses provided for in the contract to the user, ensuring their execution in the prescribed manner.

The right holder also bears other obligations, unless otherwise expressly provided by agreement of the parties. These include duties (clause 2 of article 1031 of the Civil Code):

▪ ensure state registration of the commercial concession agreement;

▪ provide the user with ongoing technical and advisory assistance, including assistance in training and advanced training of employees;

▪ control the quality of goods (work, services) produced (performed, provided) by the user on the basis of a contract.

In accordance with Art. 1032 of the Civil Code, the user is obliged:

▪ use, when carrying out the activities provided for in the contract, a commercial designation, trademark, service mark or other means of individualizing the copyright holder in the manner specified in the contract;

▪ ensure that the quality of the goods, work performed, or services provided by him on the basis of the contract corresponds to the quality of similar goods, work or services produced, performed or provided by the copyright holder;

▪ comply with the instructions and instructions of the copyright holder aimed at ensuring compliance of the nature, methods and conditions of use of a set of exclusive rights with how it is used by the copyright holder, including instructions regarding the external and internal design of commercial premises used by the user in the exercise of the rights granted to him under the contract;

▪ provide buyers (customers) with all additional services that they could count on when purchasing (ordering) a product (work, service) directly from the copyright holder;

▪ not to disclose the production secrets (know-how) of the copyright holder and other confidential commercial information received from him;

▪ inform buyers (customers) in the most obvious way for them that he is using a commercial designation, trademark, service mark or other means of individualization by virtue of a commercial concession agreement.

The concession agreement may establish the obligation of the user to provide a specified number of other entrepreneurs with permission to use, under certain conditions, a set of rights received from the copyright holder or a specific part thereof. Such permission is called a subconcession. In the contract, the provision of a subconcession may be provided as a right or as an obligation of the user (paragraph 1 of article 1029 of the Civil Code).

A commercial concession agreement provides for the use of a set of exclusive rights, business reputation and commercial experience of the right holder to a certain extent (for example, in terms of cost or quantity of goods produced or services rendered, their use in one enterprise or in a certain number of them, etc.), and with indicating or not indicating the territory of use (for example, trade in a certain type of goods only on the territory of a given subject of the Russian Federation). According to paragraph 2 of Art. 1027 of the Civil Code, both the maximum and the minimum volume of use of the objects of the concession agreement can be established.

Since, when purchasing a product or service from a user, consumers in many cases are sure that they are purchasing it from the right holder himself and rely on the appropriate quality of the product or service, in accordance with Part 2 of Art. 1034 of the Civil Code, the copyright holder bears subsidiary liability for the requirements imposed on the user in connection with the inadequate quality of the product or service. If the user acts as a manufacturer of goods, using trademarks and other brand names of the copyright holder (manufacturing franchising), the copyright holder is responsible for the quality of these goods jointly with the user (part 2 of article 1034 of the Civil Code).

Since the commercial concession agreement is entrepreneurial, mutual liability of the parties for its violation occurs regardless of their fault, unless otherwise provided by this agreement (clause 3 of article 401 of the Civil Code).

Each of the parties to a commercial concession agreement concluded without specifying a period of time has the right to cancel the agreement at any time by notifying the other party six months in advance, unless the agreement provides for a longer period. A concession agreement concluded for a period is terminated on the general grounds for termination of contractual obligations. At the same time, early termination of such an agreement, as well as termination of an agreement concluded without specifying a period, are subject to mandatory state registration.

The user, who duly performed his duties, has the right to conclude an agreement for a new term on the same terms after the expiration of the commercial concession.

The right holder has the right to refuse to conclude an agreement for a new term, provided that within three years from the date of expiration of this agreement, he will not conclude similar agreements with other persons and agree to conclude similar commercial subconcession agreements, the effect of which will apply to the same territory, on which the terminated contract was in effect (Article 1035 of the Civil Code).

Author: Ivakin V.N.

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