The co-contractors have reciprocal rights and obligations regarding the performance of the concession contract . This execution is based on the principle of good faith of the parties.
-the obligations of the grantor
The licensor must first and foremost meet the obligation to supply the products at the agreed price and conditions.
Otherwise, he engages his contractual liability. This obligation includes the obligation to manufacture the products and the obligation to deliver them to the concessionaire.
In addition, it is subject to exclusive supply, ie it cannot compete with the concessionaire by distributing these products directly to customers in the geographical area of its co-contractor. Otherwise, it may result in termination of the contract. However, in the event of default by the concessionaire, he may temporarily and during the duration of this failure limit the exclusivity of the concessionaire’s territory by selling directly to customers.
He is required to put in place means of sale to improve the image of the distribution network, in particular through an advertising strategy.
-the rights of the grantor
Despite these obligations, the grantor has significant rights towards the concessionaire. He enjoys real control over the reseller’s business. He can assess the quality of the equipment, of the personnel necessary for the sale of goods, or of the after-sales service.
Its power over the concessionaire company also extends to the control of its accounting and financial management.
-the obligations of the concessionaire
The concessionaire must comply with many obligations which are specified in the concession contract.
He has the obligation to obtain supplies from the concessionaire concerning the products of the concession. He must achieve supply quotas and objectives, hold a minimum stock of products and parts.
The establishment selling the products as well as the staff are subject to the criteria set by the licensor. The concessionaire also has an obligation to develop a good quality after-sales service. He may be required to provide the licensor with his client file and inform him about the market. But, above all, it must consolidate its territorial obligation which prohibits it from prospecting for customers outside its geographical area.
– the rights of the concessionaire
In compensation for these obligations, he has the right to freely set these prices (Competition and consumption contract n ° 6 of 01/06/2001 p19-22). This freedom may be reduced in cases where the grantor fixes a maximum price. The concessionaire may nevertheless lower the resale price because the imposition of prices is prohibited by competition law.
The concessionaire can sell the products to any category of buyers within its territory but also to resellers qualified for the distribution of the concession’s products. The only resale limit is the ban on prospecting outside its territory.
– sanctions in the event of breach of contractual obligations
Each party to the contract can see its contractual liability engaged in the event of a breach of their respective obligations. The repair gives rise to damages. In some cases, it is possible to terminate the contractual relationship if there has been a serious breach of obligations. This breach can take place through a termination clause previously inserted in the concession contract.