The concession contract

عقد الامتياز

?Soufia El Hani

صوفيا الهاني

Doctorante Université Mohammed V- Rabat

 – FSJES-AGDAL Laboratoire de Droit Privé

باحثة بصف الدكتوراه بجامعة محمد الخامس – اكدال – الرباط – مختبر القانون الخاص

Résumé : Le contrat de concession commerciale est un contrat innomé, c’est à dire non réglementé par la loi, mais que ce dernier est née de la pratique contractuelle. Pour autant, le contrat de concession n’est pas neutre. C’est un contrat commutatif complexe impliquant un ensemble d’échanges et de services de la part des partenaires. Mais ce qui caractérise avant tout la concession, c’est l’exclusivité. En effet le concessionnaire dispose d’une exclusivité territoriale pour distribuer les produits du concédant. Toutefois, l’intérêt de ce sujet se révèle important et pertinent, car les contrats commerciaux sont passés avec un nombre considérable de clients, souvent éloignés, et que le producteur ou le distributeur ne connaît pas lui même. Donc il semblait nécessaire de les atteindre par des agents et représentants, mais également de recourir à une personne dont le rôle sera de rapprocher les parties. Ainsi, les praticiens ont mis en place deux formes de contrats qui répondent à ces besoins urgents dans le monde des affaires, il s’agit notamment du contrat de concession commerciale et du contrat de franchise. Cependant, Comment peut-on déterminer cette clause d’exclusivité dans la pratique? Quelle est réellement la portée de cet engagement d’exclusivité entre concessionnaire et concédant? Cet exposé entend donner une réponse à ces questions.

Abstract : The commercial concession contract is an innominate contract, i.e. not regulated by law, but it is born of contractual practice. However, the concession contract is not neutral. It is a complex commutative contract involving a set of exchanges and services on the part of the partners. But what characterizes the concession above all is exclusivity.  Indeed, the concessionaire has a territorial exclusivity to distribute the products of the licensor. However, the interest of this subject is important and relevant, because commercial contracts are made with a considerable number of customers, often far away, and that the producer or distributor does not know himself. Therefore it seemed necessary to reach them through agents and representatives, but also to resort to a person whose role will be to bring the parties together. Thus, practitioners have established two forms of contracts that meet these urgent needs in the business world, namely the commercial concession contract and the franchise contract. However, how can this exclusivity clause be determined in practice? What is the real scope of this exclusivity commitment between the between the concessionaire and the licensor? This paper intends to provide an answer to these questions.

Introduction

Most commercial contracts are governed by the Commercial Code or by special laws; as far as commercial contracts are concerned, it is important to specify that these contracts are professional contracts dominated by the legal security of operations. Commercial law exempts commercial contracts from certain constraints of civil law, in particular with respect to proof and prescription, in order to meet the needs of professional life.

However, in the business world, the difficulty no longer lies in production or manufacturing, but rather in imagining new products and services to attract consumers, hence the role of qualified know-how; to then make them known, hence the role of brands; and finally to sell them regularly, which is how the distribution circuits came into being in order to get the product from the producer to the consumer.

It is possible to distinguish between centralized circuits (department stores, supermarkets, etc.), associated circuits (retailer cooperatives, etc.) and controlled contractual short circuits; these constitute commercial concessions.

 Since the beginning of the 20th century, Morocco has had a long experience in the field of concessions, in particular through the Aljeziras Act of 1906, which concerns the signing of the first concession contracts by resorting to foreign capital for the operation of public services and setting the mechanisms for their adjudication; the 1912 Protectorate Treaty which favored the signing of concession contracts mainly with French companies, including the concession for the operation of the ports of Casablanca Fdala and Tangier in 1916; as well as the concession for the Fez -Marrakech railroad line in 1920, and many others. .  Except that the Moroccan legislator has not given a legal definition to the commercial concession contract, and it is not subject to any specific regulation. [1]

Nevertheless, it has been defined in the Fontanet circular of March 31, 1960 as “an agreement binding the supplier to a limited number of traders to whom he reserves the sale of a product on condition that they meet certain obligations. [2]

The French doctrine defines the commercial concession contract as follows: “the commercial concession contract is the one by which the holder of a trademark, or licensor, undertakes on a given territory to sell only to his co-contractor, or licensee, who undertakes, in return, to distribute the conceded goods and only these goods, respecting the commercial policy defined by his partner.

The concession is very common for mass products: lemonade, petroleum products, cars, bicycles and motorcycles, agricultural equipment, tools. It allows manufacturers to sell their goods under good conditions and to supervise their distribution through their network.

It ensures the development of sales, rationalizes trade and remains a guarantee of product quality [3]. In Moroccan law, the concession contract is not subject to any particular regulation, it is subject to the rules of common contract law, and even to the jurisprudential support which provides protection to concessionaires. This is not the case in Community law. Two exemption regulations concern this contract. The first one, dated December 27, 1999, is applicable to all distribution contracts and the second one, dated June 28, 1995, is specific to the car dealership contract. Moreover, the dealership contract is subject to competition law, as it includes clauses that affect free competition on the market.

  In other words, one could say that the commercial concession contract is an innominate contract, i.e. not regulated by law, but that it is born from contractual practice. However, the concession contract is not neutral. It is a complex commutative contract involving a set of exchanges and services on the part of the partners. But what characterizes the concession above all is exclusivity[4]. Indeed, the concessionaire has a territorial exclusivity to distribute the products of the licensor. However, the interest of this subject is important and relevant, because commercial contracts are made with a considerable number of customers, often far away, and that the producer or distributor does not know himself. Therefore, it seemed necessary to reach them through agents and representatives, but also to resort to a person whose role will be to bring the parties together. Thus, practitioners have established two forms of contracts that meet these urgent needs in the business world, namely the commercial concession contract and the franchise contract.[5]

 However, how can this exclusivity clause be determined in practice? What is the real scope of this exclusivity commitment between the concessionaire and the licensor? This paper intends to provide an answer to these questions.

 In order to answer these questions, we will establish a two-part plan. In the first part, we will deal with the general framework of the commercial concession contract and in the second part, the execution of this contract.

PART I – THE GENERAL FRAMEWORK OF THE CONCESSION CONTRACT

 In the absence of specific regulations, the commercial concession contract is governed by the general law of contracts, i.e. the DOC.

Thus, the theory of contracts appears to occupy a central place in private law: on the practical level because it is by far the most frequent source of obligations, and on the theoretical level because the concepts it applies are scattered throughout all fields.

  It can be said that the theory of contracts is at the heart of private law and that it permeates all its disciplines.

  However, one might ask whether the conditions of validity of a classical, regulated, common law contract are the same as those of a commercial concession contract, known as an innominate contract, and also what are the specificities and requirements incumbent on the parties in a concession contract?

  First of all, it is necessary to specify that the classical theory is based on a fundamental principle, which is the autonomy of the will, according to which people are free to create their own law: which is the contract.

According to the liberalist view, the freedom of an individual can only be limited by his own will, in which case the contract is superior to the law, which must be limited to being suppletive to the will of the parties.

However, the concession contract is a consensual contract that is formed by the simple exchange of consents. Its proof is free since it is concluded between traders. In fact, the parties do not fail to draw up a written document to formalize their relations and to set out the main clauses of their agreement on the area granted, the products covered by the concession, the standards to be met, etc.[6]

Section 1. The particularity of the concession contract

The main clause of the commercial concession contract is: exclusivity. In other words, the licensor undertakes to sell the contractual products only to the licensee in a certain territory (exclusive sale) and vice versa (exclusive purchase). In the concession contract, a producer or supplier grants a trader the right to market his products in his name and on his behalf.

The contract is therefore similar to a sales contract, as the licensor is obliged to supply the licensee with specific goods on a regular and exclusive basis.

But the contract is not the same as a sale. As the French Court of Cassation has observed, the purpose of the contract is “to ensure, in a given territory and for a given period of time, the exclusive distribution of the licensor’s products by a licensee, in the name and on behalf of the licensor” and, consequently, “cannot be identified with successive contracts of sale relating to these products”. [7]

Sub-section 1: Simple or reciprocal exclusivity

In its pure state, the concession contract contains a double exclusivity. The exclusivity is said to be simple when the licensor has undertaken to sell in a given area to only one dealer.

 He retains the freedom to trade with anyone, as long as it is outside the concession area, or even within it, with his personal customers. In this case, he is often contractually obliged to pay compensation to the dealer in proportion to the sales made.

The exclusivity is said to be reinforced, either when the licensor undertakes not to sell in the protected sector, or when the dealer undertakes not to encroach on the territory of the other members of the network in any way whatsoever. However, this type of exclusivity, qualified as absolute, is strictly condemned by the competition authorities, and the dealer benefits from a limited territorial exclusivity which protects him against sales made by the licensor, and against active sales (sales made by other dealers with the use of promotions or from an establishment in the territory granted).

This exclusivity must be respected, as already mentioned. In fact, the licensor undertakes to ensure that the exclusivity is respected by each member of the network, for whom he acts as a sort of guarantor. It is up to the licensor to take action against any troublemakers, and the licensor would be held liable if he violated the exclusivity clause, whether simple or reinforced, while the licensee undertakes to purchase the products specified in the contract only from the licensor.

One could say that the exclusivity agreement, whether it concerns distribution or supply, rationalizes trade.

It is accused of being an instrument of domination of the licensor over the licensee and over the clientele, of hindering competition by partitioning markets, of conferring rents and of slowing down economic progress by preventing the acquisition of better products elsewhere.

In France, we speak of simple or reciprocal exclusivity. On the one hand, the distributor undertakes to obtain supplies only from the licensor and at the same time undertakes not to market competing products. Under Article L.330-1 of the French Commercial Code, the duration of this exclusivity clause cannot exceed ten years. On the other hand, the supplier agrees to deliver the products only to the dealer in the area assigned to him (city, department, region or even country). In return, the dealer has a monopoly on resale in his area, although this does not prevent other dealers from competing with him. The territorial protection granted to the concessionaire cannot be absolute, as the compartmentalization of markets that this protection implies is contrary to competition law.

  However, some concessions are not accompanied by exclusive supply. This is the case in the distribution of petroleum products or beverages, and especially in the so-called “beer contracts” between brewers and beverage outlets.

Subsection 2: Legal independence of the partners

  The commercial concession contract does not completely integrate the concessionaire into the licensor’s business. As a simple link in a chain, the network of the manufacturer’s sign, he participates in a whole, but retains his legal freedom.

The concession system combines the advantages of an integrated network of branches with the flexibility and lightness of an independent business; it combines the functional advantages of integration with the dynamism of independent operation, in which the distributor is personally responsible for his faults and debts, and in which he takes risks. The question that arises is what advantages do the partners derive from this independence?

In fact, the licensors have been trying to attract the services of qualified technicians by granting them certain advantages, including the exclusive right to resell. Elaborate products, for which the distributor’s advice plays a decisive role in the purchase decision, require excellent personnel, special knowledge in the trade practiced and even an after-sales service and maintenance, all of which are provided by the dealer, thus relieving the licensor.

Moreover, the distributor finds several advantages in the contract of concession, the most obvious being to have, from the opening of its trade, a turnover whose importance will be function of the notoriety of the licensor and especially of its mark. In any case, the concession is a certainty of clientele, which will raise doubts as to the existence of a business of one’s own and as to the ownership of the clientele.

  As far as the customers are concerned, they will benefit from the fact that the dealer has the highest quality skills. Thus, its advice will be more relevant and its services more complete and better insured than an ordinary dealer. In addition, the dealership is a security factor for the customer (some dealerships conduct customer surveys to measure customer satisfaction with the services provided by the dealership). In addition to the above-mentioned advantages, the buyer benefits from the legal protections of common sales law when the concession concerns the sale of a product. Furthermore, the customer of a dealer has the advantage of a contractual guarantee in addition to the legal guarantee, which gives him, in a way, a guarantee against the entire manufacturer’s network, something that does not exist at all with a simple distributor.[8]

Subsection: The interdependence of the parties

  The concession contract maintains the legal independence of the partners, while creating an interdependence between the members of the network. It organizes a de facto domination of the licensor over the licensee, which limits the independence already studied. In addition, de facto dependency relationships are established between the parties by force of circumstance. Some of them even occupy a position of strength, resulting either from exceptional competence in a complex technical sector or from the importance assumed by the concessionaire in its geographical area. The dealer’s importance sometimes stems from its sector of activity. But these are only exceptions. In most cases, the power of the licensor exceeds that of the licensee, and the latter is dependent on the former. How does this domination manifest itself?

The concession contract includes various stipulations, all of which have the consequence of imposing constraints and controls on the concessionaire. Among these constraints, the inventory clause reveals a speciality. In most concession contracts, the concessionaire is obliged to hold a certain number of goods or spare parts, known as stock, in order to better satisfy its customers. The stock clause always provides that the latter must be constantly supplemented as and when sales are made to customers, respecting the plans of assortment. The stocks often represent a significant monetary value. This means that the licensors are relieved on their distributors of the management of stocks, in these conditions in case of breach of contract, the dealer is in possession of a stock that he can not sell and which he can not impose the resumption by the licensor unless clause in the contract providing that. The only possibility left to him is to act on the basis of civil liability for fault, if it exists. By dominating the concessionaire, it is the maintenance of the market that is sought, when the licensor cannot obtain it through its subsidiaries or agencies.

In any event, the grantor must be careful not to interfere too much in the affairs of the concessionaire, unless it runs the risk of being ordered to pay all or part of the liabilities as a de facto manager in the event of the latter’s bankruptcy. In other words, the licensor has to maintain a delicate balance between, on the one hand, the licensee’s interdependence and, on the other hand, the control that it must exercise over the licensee in order to maintain the coherence and quality of the network and its good brand image. Obviously, the boundary is difficult to draw: it is a matter of discreet pragmatism and common sense.

Section 2: The conclusion of the commercial concession contract

In order to avoid any risk of nullity of the concession contract, some operations must be carried out and respected, namely the conditions of validity of this contract.

Subsection 1: Substantive conditions

First of all, it is a contract concluded “intuitis personae”, which implies a duty of loyalty, honesty and sincerity for both parties, whose common interest is the development of a clientele, and consequently, of the turnover.

Furthermore, the commercial concession contract is most often used in the marketing of durable consumer goods such as branded products. The particular nature of these goods requires a professional aptitude to meet the requirements of the customers. It is for this purpose that the manufacturer will select the resellers. The licensor has the possibility to set requirements for the sale of his products as well as for the price at which they will be sold. He can indeed establish retail prices; these are maximums that cannot be exceeded by the dealer.

Also, for the contract to be valid, the dealer has the possibility of lowering the price, especially in the case of discounts to certain customers. This freedom to modify prices is essential because otherwise the contract would not be valid due to the prohibition of prices imposed by competition law. Since the dealer buys to resell, the price cannot be fixed by the licensor: this is a major difference from the commercial agency or commission contract.

Although the dealer buys the goods from the licensor, his remuneration is often fixed in the form of a commission. Otherwise, it results from the margin he makes on the resale.

Subsection 2: Formal requirements

 The structure of the commercial concession contract is based on a support, i.e. the framework contract, which will set out the essentials of future contracts and will define in advance the regime applicable to the parties during the life of the contract, and also at the end of it. Originally, this type of commercial contract was not subject to any particular formal requirements. However, it became clear that since the purpose of the contract was to govern business relationships of varying lengths, which we know are often cruel, the need for a written document quickly became apparent. From then on, the drafting of a document became the rule, in particular to meet the requirements of competition law.

   The purpose of the writing – for some years, the law of the contract has been developing a philosophy of consumer formalism, today these protective concerns interfere in the business relations between professionals. Indeed, the legislator wants the conditions imposed by the supplier to be written down, the objective here is to protect the distributor who is the weak party of the contract, it is a question of fighting against the omnipotence of the supplier who could indulge in discriminatory practices (under the cover of commercial cooperation) or make his distributor bear much too heavy charges.

Part II – Performance and termination of the concession contract

By entering into this type of business relationship, the licensor and the licensee have opted for a commercial collaboration that entails certain obligations for each. The dealer is entrusted with the distribution of the products and the preservation of the reputation of the licensor’s brand and, in return, the licensor promises to provide him with a high level of assistance. These reciprocal obligations between the parties will result in a special regime for the termination of their contractual relationship. Given the strength of the commercial collaboration established between the parties.

Section 1: The obligations of the parties

  According to the provisions of article 737 of the DOC, the lessor of works or services is liable not only for his part, but also for his negligence, imprudence and carelessness and continues “any agreement to the contrary shall be without effect” Also, article 740 stipulates in this regard: “the lessor of service or the lessor of work to take care of the conservation of the things which were given to them for the accomplishment of the services or the work of which they are in charge, they must restore them after the accomplishment of their work and they answer for the door of the deterioration imputable to their fault however when the things which they received were not necessary for the accomplishment of their work they answer only as simple depositaries”. [9]

Even if the performances of the parties to the commercial concession may seem unbalanced, it is nevertheless certain that each of them must fulfil a certain number of obligations towards the other: the licensor towards the licensee (Subsection 1), and the licensee towards the licensor (Subsection 2).

Subsection 1: The obligations of the Licensor

 The concession contract imposes on the parties numerous obligations which derive from the sale which is the basis of the agreement of wills, but also from the collaboration which the contracting parties have promised each other and the exclusivity which they owe each other.

The complexity of the relationship explains why the grantor’s obligations are not identified with those of an ordinary seller.[10]

– An obligation to sell: The licensor generally sets the terms of sale himself. He must not abuse this prerogative. He must supply according to the terms and conditions. [11]

He undertakes to sell the product to a competitor of the licensee. In this type of contract, the licensor is bound to sell its products exclusively in a specific geographical area (which can vary greatly: neighborhood, city, department, region, continent). However, the grantor may expressly reserve the right to carry out certain operations (which should be listed exhaustively) in the territory granted, under penalty of contractual liability.

– An obligation to supply: The licensor undertakes to regularly supply, under specific conditions and at specific prices, the licensed products ordered by the licensee, in accordance with the quotas provided for, as well as to respond as quickly as possible to all orders exceeding the said quotas.

– An obligation to supply the support: He commits himself here to ensure the concessionaire a support to the resale, notably by the supply of advertising supports (leaflets, objects, advertisements, posters…).

– Obligation related to the form of remuneration: In this context, the licensor undertakes to guarantee the licensee a remuneration in the form of a discount as a percentage of the sales price in the licensor’s catalog.

In addition, the counterpart of the forbearance to which the licensor commits is found in the licensee’s obligations.

In other words, the licensor must first enforce and respect the exclusivity zones and therefore only contract with its licensee in the sector in question. This assumes, of course, that the sales area has been defined beforehand.

  The contract generally specifies that “the exclusive right to sell is granted to the concessionaire for the area of … (such city)” and that consequently “the licensor undertakes not to sell directly or indirectly in this area to anyone other than the concessionaire and to forward to the concessionaire any requests that may be received from the concession area, so that the concessionaire may deal with the interested parties himself”.

The grantor also promises to assist its co-contractor. This assistance is part of the nature of the contract. It takes various forms: technical (supply of parts and materials, advice), commercial (organization of advertising campaigns, etc.) and sometimes financial when the investments required for the distribution of the product are significant.

 Finally, the licensor grants the licensee the right to use the product brand. The licensor guarantees the use of the trademark, but does not grant a trademark license, because the licensee does not have the right to affix the trademark to the product. The use of the trademark is simply lent.

Subsection 2: The obligations of the concessionaire

  The obligations of the concessionaire are undoubtedly more onerous than those of the grantor. They provide him, it is true, with a certain legal security, but at the same time they place him in a situation of economic dependence. The non-fulfilment of these obligations results in actions for termination or liability.

  Thus, assured of not being in competition with the distribution of the licensor’s products, the licensee pays for this advantage with a number of obligations.

– Obligation to respect the quota clause: This obligation represents a whole series of clauses, which vary according to the nature of the concession, and which express the integration of the concessionaire into a distribution network organized by the licensor. Thus, it often obliges the concessionaire to sell a certain quantity of goods. Finally, it should be noted that this clause constitutes one of the main obligations of the concessionaire, the non-observance of which may lead to the termination of the contract.

– A right to control competence: In fact, the concessionaire often grants the grantor the right to control the technical competence of the personnel he employs. Also, the administrative and financial organization of the concessionaire must generally be aligned with a type recommended by the grantor, in order to facilitate the exercise of control by its agents.

– Obligations to do: The licensee is obliged first of all to provide the techniques and sales methods developed by the licensor. In addition to this main obligation, the licensee has an accessory obligation to have establishments and stores whose presentation and operation of personnel and equipment must meet the standards established by the licensor.

– Obligations not to do: In return for its monopoly on the sale of the licensor’s products in a given territory, the licensee undertakes not to purchase and consequently not to sell products that compete with those manufactured by the licensor. In addition, the Licensee reserves the right to purchase exclusively from the Licensor for a given product line. In addition, the licensee may not canvass or sell directly or indirectly to customers outside its contractually defined area.

    In other words, the dealer must do everything necessary to preserve the unity of the network and defend the image of the licensed brand. He may not freely subcontract or assign his contract. He is thus obliged to follow the commercial policy decided by the licensor, to respect its sales methods, to arrange the sales outlets in such a way that the customers “feel at home” and remain loyal, to train his staff so that they remain competent and to ensure a quality after-sales service.[12]

Section 2: Termination of the concession contract

An obligation is extinguished when the former creditor is no longer in a position, as a result of a factual or legal circumstance, to require its performance. Naturally, one thinks of the possibility of a payment, the effect of which is to put an end to all claims of the creditor. But there are also other ways in which obligations can be extinguished, which differ from mere performance, as in the case of the termination of a commercial concession contract.[13]

The term “end of contract” is well established in doctrine and jurisprudence and can be understood in different ways. Some take a broad view of the end of the contract. They consider that it corresponds to all cases where a contract, in particular a concession contract, whether valid or null, comes to an end. Thus, according to them, nullity is a cause of termination of the commercial concession contract. However, nullity does not constitute a cause of termination of the contract in general and the concession contract in particular. It is a sanction of the formation of the contract. It intervenes to sanction the existence of an original defect. A void concession contract is invalid from the moment of its formation. It has no legal value.

Subsection 1: Causes of termination of the concession contract

  The termination of the relationship between the parties may be due to the arrival of the term or to other reasons

There are different ways to terminate a commercial concession contract. There is the end of the contract as foreseen by the different parties to the contract, the lack of performance by one of the parties to the contract and the unilateral termination.

The end of the concession contract leads to the liquidation of the contractual relationship and sometimes gives rise to a possible liability of the party responsible for the breach. In addition, it may trigger post-contractual obligations: non-competition obligation, non-reaffiliation obligation, confidentiality obligation, obligation to take back inventory and, finally, obligation to pay a so-called customer indemnity.[14]

Paragraph 1. Termination of the concession contract by the end of its term

 As regards the termination of the concession contract by the end of its term, it happens, in certain cases, that the concession contract is concluded for a certain period of time, the realization of the operation being heavy and complex, it requires a certain length of time. However, when the concession contract is concluded for a fixed term, it ends at the end of this term.

In fact, on the expiry of the term provided for by the parties or imposed by law, the contract is terminated without notice, unless the parties have agreed otherwise. In principle, the grantee cannot claim a right to renewal of his contract even if it has been previously renewed.

Paragraph 2. Other forms of termination of the concession contract

Termination is not the only cause of termination of a concession contract, but there are also other causes that may terminate a concession contract. Among these causes of termination are non-performance by a party to the contract and unilateral termination of the contract.[15]

   With respect to breach for non-performance, the creditor of the non-performing obligation may wish to terminate a contractual relationship that is going sour. He then seeks to free himself from the non-performed contract by means of resolution, which thus appears as another possible sanction for non-performance of the contract. Thus, if the non-performance of the contract is attributable to the debtor, the resolution of the contract will sanction the debtor’s failure to perform his obligations. On the other hand, if the non-performance is due to a case of force majeure, the contract will be rescinded by virtue of the theory of risk. Finally, if the non-performance is merely temporary, the creditor will not seek to bring about the annulment of the contract but to put pressure on the debtor by means of the exception of non-performance.

In the context of a commercial concession contract, only the fault of one of the parties can justify the termination of the contract during the period of execution fixed by the parties. In accordance with the common law on the termination of contracts for non-performance. It would be up to the party who invokes it to request it in court. The grantor, for example, whose brand image may be considerably damaged by the grantee’s failings, could thus terminate the contract before its normal term.

Generally, concession contracts are concluded for a fixed term. However, this does not mean that franchise agreements cannot be concluded without a term. The parties are free not to set an end date for their contractual relationship and to enter into an open-ended contract.

A franchise agreement is a contract with a right to unilateral termination. However, it should be noted that when a commercial concession contract is concluded without a limited term, the principle is unilateral termination of the contract. The concessionaire and the grantor bound by an open-ended concession contract may then freely and unilaterally terminate their contract whenever they deem it appropriate to terminate the relationship they have entered into. Moreover, each of them has the right to terminate the contract unilaterally, provided that they do not abuse their right and that they respect a notice period.

A contract is never concluded for life. When the concession is made for an indefinite period, the principle is applied that each party is entitled to withdraw from a commitment that cannot be perpetual. Applying the theory of abuse of right, the case law considers however that the author of the breach must not commit any fault in the exercise of his right.[16]

   The termination of the contract puts an end to the commercial relationship between the contracting parties. The dealer can no longer market the supplier’s products and brand. He is put out of the distribution network. The dealer has the obligation to return the equipment that may have been lent to him by the licensor. He has to respect all the clauses foreseen in the concession contract such as, a non competition clause.

The licensee is also obliged to return the sign and descriptive signs of the licensor. If he fails to do so, their use may be considered as infringement.

The licensor may be obliged to take back all remaining stock from the dealer, if this has been provided for in a clause in the concession contract. In cases where the contract does not provide for this, the licensor is not obliged to buy back the goods.

Subsection 2: Study of the decision of the Court of Cassation n° 846 of 14/07/2004 concerning the unilateral termination of the concession contract

The contract of exclusive concession of sale is the contract by which a producer confers the exclusiveness to a distributor to market in its name and for its personal account its products. When the concession is concluded for an indefinite period of time, either party may terminate the contract at any time, subject to a contractual or customary notice period. However, even if the party who terminates a contract of indeterminate duration in compliance with the terms of the contract does not have to justify any reason, the judge may nevertheless, on the basis of an examination of established circumstances, find that the exercise of the right to terminate has been abused. Also, as it concerns a mandate, the termination may give right to damages if it is abrupt, unforeseeable and occurred without prior notice, as it appears from the conclusions of the Supreme Court ruling n° 846 of July 14, 2004, file n° ‘415/3/2/2003.

In this case the company F.C.I had conceded to the company C.C the right to import and to market its products on the whole Moroccan territory as from January 1st, 1987 by a letter of 06/10/1987. In a letter of 06/02/1995, it informed him of its intention to create its own subsidiary in Morocco and in another of 15/03/1995, it withdrew the right of exclusive concession to him.

Considering itself wronged, the company C.C., introduced a request to the Court of First Instance, asking for the payment by the company F.C.I of a provisional indemnity of at least 10.000.000,00 Dh.

The court rejected the request. This judgment was annulled by the Court of Appeal which condemned the company F.C.I to the payment of damages of 6.748.015,00 Dh in addition to the legal interests. The aforementioned company, considering the judgement to be ill-founded, has appealed to the Court of Cassation against this judgement.

    It claims indeed that the Court of Appeal could not condemn it to payment on the basis of an abusive termination of the contractual relationship pronounced, then, in accordance with the commitments taken in the letter of 06/10/1987. Similarly, its right to unilateral termination was not exercised in a malicious or reckless manner.

 It is therefore a question for the Supreme Court to know whether the company F.C.I. is not abusing its right to unilaterally terminate the exclusive concession contract for an indefinite period of time by terminating its contractual relationship with the concessionaire company, and consequently, to be condemned to pay damages.

L’argumentation de la Cour d’appel n’a pas été reconnue par la Cour suprême qui a décidé de casser l’arrêt attaqué et son renvoi devant la même Cour au motif qu’il était insuffisamment motivé puisqu’il ne discutait pas toutes les pièces du dossier. Reconnaissance du droit de la société concédante de mettre fin unilatéralement à la concession exclusive si elle respecte le délai de préavis contractuel et n’a pas l’intention de nuire à l’autre partie, et ne peut donc être condamnée à des dommages et intérêts.

Conclusion

The concession contract belongs to the category of innominate contracts. As a result of contractual freedom and commercial practice, the commercial concession contract is an innominate contract, i.e. it is not subject to any specific legal regime. Thus, this contract lives on the sole sap of the general theory of contracts. However, the legal regime for the termination of the contractual relationship between the concessionaire and the grantor depends on whether the concession contract is concluded for an indefinite or a definite term.

    Commercial concession contracts raise a question of legality with regard to the requirements of competition law because of the compartmentalization that they are likely to achieve. These contracts are not intrinsically illegal, although they contain clauses that restrict competition.

 Furthermore, although similar to the franchise agreement, the commercial concession agreement implies the provision of a commercial name, symbols, as well as commercial assistance from the licensor to the concessionaire; it does not refer to the existence of know-how as is the case with the franchise agreement. It does not create any obligation to transmit knowledge specific to the business to the licensee. In other words, unlike the franchise agreement, the concession agreement does not require the communication of know-how.

BIBLIOGRAPHIY

·  Alain Benabent, droit civil (les obligations) 3 ème Edition, Montchrestien, 1991.

·  Hassania cherkaoui, droit commercial, 2eme édition 2003.

·  Mohammed Drissi Alami Lmachichi, droit commercial fondamental au Maroc, Fedala, Rabat, 2006.

·  Droit des affaires, Tome 1, Les activités de l’entreprise, Mohamed Nakhili, El Badii Edition.

·  Contrats civils et commerciaux, François Collart Dutilleul; Philipe Delebecque, 9ème édition 2011, DALLOZ.

·  PHILIPPE MALAURIE/Cours de droit civil : Les contrats spéciaux. Tome VIII. 11eme Ed. Cujas. p.34.

·  Cl. Champaud, « la concession commerciale », RTD com., 1969

·  MARIE GRANIER /Mémoire sur la concession exclusive Marie .université Montpelier I

·  Dahir n° 1-00-225 du 2 rabii I 1421 portant promulgation de la loi n° 06-99 sur la liberté des prix et de la concurrence. (B.O du 6 juillet 2000) ;

·  Dahir (9 ramadan 1331) formant Code des obligations et des contrats (B.O. 12 septembre 1913) ;

·  http://www.lexinter.net/JF/concessionnaire.htm

·  http://blog.frasson.net/23/09/2009/comportement-consentement-volonte/

·  http://www.murielle-cahen.com

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