Drafting a commercial franchise contract
A contract described as a commercial franchise is reviewed in Iraq without reliance on a standalone franchise statute whose number is not cited here without a published official instrument. The framework is on preparing a contract. It is distinguished from commercial agency and from a company or branch structure.
From which texts is the contract read?
The Civil Code rules on formation, binding force, rescission and agreed compensation apply to this bargain as they apply to others, unless a special text takes their place. If the contract includes a licence to use a mark, article 18 bis of the Trademarks Law allows the owner to license one or more persons to use the mark, without the licence preventing the owner from using it unless otherwise agreed, and without registration of the transfer or the licence being required in order to prove the lawfulness of the mark against third parties. Entering the licence on the register may assist in proof, and is discussed within the limits of the text.
Instructions No. 1 of 2020, in their first article, treat as one of the forms of commercial agency a "franchise agency" in which the use of one or more intellectual-property rights is authorised for producing the goods locally according to the specifications and marketing them under their original mark, in a geographical area and for a fixed period, with the franchisor being bound to provide technical support. If that form applies, the path of licensing the agent and recording the contract before the Registrar of Companies is opened, and the civil drafting of the contract alone does not stand in for that path.
What is reviewed in the draft, and what is not mixed with it?
The subject of the licence, the territorial scope, the duration of the relationship, the technical support to be given, and what follows termination are reviewed in the light of articles 146, 177, 178 and 170. The contract is not mixed with the formation of an Iraqi company or with the opening of a branch of a foreign company; each path remains in its own text.
The office follows a reading from Baghdad, al-Yarmouk.
Legal basis and sources
- Civil Code No. 40 of 1951
- Trademarks and Trade Descriptions Law No. 21 of 1957 as amended
- Instructions No. 1 of 2020
Frequently asked questions
Is there a standalone franchise statute in Iraqi legislation?
The recorded official sources set out no stand-alone franchise statute, and the contract is read from the Civil Code, from the trademarks legislation, and from the agency instructions if they apply.
Does drafting a franchise contract stand in for a commercial-agency licence?
No, if the "franchise agency" form in the 2020 Instructions applies. The licence and the recording of the contract are a path before the Registrar of Companies, set out on the commercial-agency page.
Related topics and articles
- 01Drafting a contract when dealing in BasraDrafting a contract when dealing in Basra under the federal Civil Code, followed from Baghdad.
- 02What does the Civil Code govern in a contract?How a contract is formed and becomes binding under Civil Code No. 40 of 1951: offer, acceptance and subject-matter.
- 03Points to review in a contract before signingMatters to review before signing: parties and authority, subject-matter, time, rescission, compensation and language.
- 04A consultancy contract, and how it differs from a contract of employmentConsultancy and employment contracts under Labour Law No. 37 of 2015, including article 37 on the written contract.
- 05The governing law and the language of a contract with a foreign partyGoverning law and contract language with a foreign party, read with Iraqi mandatory rules, without naming a court the statute does not name.