A concession is a government contract with a private national or foreign company or monopoly. The subject of the agreement is the transfer of enterprises or land plots from the state for construction, extraction of minerals and other activities.
The purpose of the concession is the development of natural resources, the development or restoration of the economy in the country.
Types and parties to concession agreements
The following main objects of concession are distinguished:
- Project, construction, operation. The subject of the agreement is the construction of the facility, its operation and use of the building by the concessionaire.
- Operation, design, construction. The subject of the contract is a functioning facility. There is an expansion, reconstruction or refurbishment.
The first version of the concession is implemented for large investment projects: the construction of tunnels, bridges, roads. The second scheme is used in the energy, utilities and social sectors.
Parties to a commercial concession agreement:
- Condenser is a state. On his behalf is the government or an authorized executive body, a subject of the country or a municipality.
- Concessionaire - a national or foreign company, individual entrepreneur, party with a partnership agreement.
Objects of the concession agreement
Objects of the agreement - property as part of the property:
- transport infrastructure - roads, tunnels, parking lots, checkpoints of vehicles;
- railway lines;
- river, sea ports, hydraulic engineering structures, ships of various types;
- aerodromes, industrial and engineering infrastructure of airports;
- thermal power plants;
- utilities;
- healthcare facilities.
Concession agreement
The concession agreement is governed by Chapter 54 of the Civil Code of the Russian Federation. Since January 1, 2008, the form has been applied in a new edition: by agreement, the copyright holder transfers the user to use a combination of exclusive rights in their activities. The subject of the contract is provided for a fee for a specified period or without a validity date.
The concession agreement has the following characteristic features:
- Parties to the contract - persons with the right to conduct entrepreneurial activity: individual entrepreneurs or commercial companies;
- an obligatory element of the subject of the agreement is the provision for use of exclusive rights without assignment;
- the copyright holder provides the user with advisory and technical assistance, the concessionaire complies with the instructions of the grantor;
- legal independence of the user is maintained, the entrepreneur acts on his own behalf, but informs the consumer that the rights of the shareholder are being used.
An agreement is a consensual, bilaterally binding, onerous agreement.
Concession is an analogue of the institution of franchising. The Civil Code does not use the concept of “commercial concession”. Legislation and lawyers use the term “concession agreement”.
Agreement Elements
A concession is the signing of an agreement by such parties: the copyright holder and the user. Article 1027, paragraph 3 of the Civil Code of the Russian Federation regulates that commercial enterprises and individual entrepreneurs act as participants.
Subject of the contract. Exclusive rights, including a service mark and product brand, commercial designations and production secrets (know-how).
Exclusive rights are divided into two groups - necessarily transferred by agreement and those that can either be transferred to use or remain with the copyright holder.
Price and term of the contract. Compensation to the shareholder is paid by the user in fixed, periodic payments or in another form prescribed in the agreement. A percentage of revenue, margins on wholesale goods are deducted (article 1030 of the Civil Code of the Russian Federation).
The issue of price is decided by the parties. The article of the Civil Code of the Russian Federation does not stipulate or provide for consequences from cases where the cost of the agreement is not determined.
The effective date of the contract is established or not applied by the parties (article 1027, paragraph 1 of the Civil Code of the Russian Federation).
A concession is an agreement that includes the rights and responsibilities of the parties. The copyright holder is obliged:
- transmit user documentation on technical and commercial parts;
- instruct the concessionaire and his staff on issues related to the use of rights;
- conduct state registration of the contract, if it is prescribed in the agreement;
- assist the user;
- control the quality of services, goods produced by the user.
The copyright holder has the right to set the selling price of products or to appoint upper and lower limits.
User Responsibilities:
- use exclusive rights specified in the agreement;
- follow directions and instructions of the copyright holder aimed at providing methods and conditions for using the product brand, service mark;
- not to disclose the production secrets of the concessor;
- convey information to the consumer that the concessionaire uses the brand, the service mark of the copyright holder;
- to provide the consumer with services that the buyer could count on when ordering goods directly from the investor.
User has the right to provide exclusive rights under a subconcession agreement, on terms agreed with the copyright holder.
Termination
Each of the participants has the right withdraw from the contract warning the other side for six months. The contract is terminated in case of unilateral refusal of the concessionaire, if the quality mark or product brand of the copyright holder has changed.
Bankruptcy of one of the participants, death of a shareholder, if a legal entity or individual entrepreneur has not entered into the inheritance rights, - grounds for termination of the contract.
Concession is one of the forms of public-private partnership agreement with mandatory registration of the contract. A contract is a multifactorial tool oriented to solve current problems in certain areas of the economy.
