The effects of defective pre-contractual information on the franchise relationship. A disruptive view.

In Spain, the obligation to provide pre-contractual information was firstly regulated in Law 7/1996 on Retail Commerce. However, neither this Act nor its Royals Decrees (which develop this Act) lay down the civil consequences of such defective information.

In transactions on tangible goods, the general principle is caveat emptor (buyer beware), whereas in intangible transactions the contrary principle frequently emerges: it is the seller who must inform of the main features of what he sells.

From this point of view there is no doubt that the franchise consists of a set of intangibles, either because what the potential franchisee wishes to acquire is the right to use a successful business model, or because this business model is formalised through the right to use a know-how, a brand license and technical and/or commercial assistance.

The aim of pre-contractual information is precisely to ensure that the negotiating will of the contracting parties is properly formed.

Regarding such information, there are two important points to be considered: a) the content of the pre-contractual information b) and the legal consequences of lack or defective pre-contractual information. These topics are thoroughly dealt with in chapter number 15 called The effects of defective pre-contraactual informarion in the franchise relationship. A disruptive view.

This chapter is part of the Yearbook of the publishing house Tirant lo Blanch called Actualidad Mercantil 2018, written by Jordi Ruiz de Villa Jubany, Chairman of the Committee of Experts of the Spanish Franchiser Association (AEF) and Partner of the Distribution and Franchise Department of JAUSAS, and Miguel Mejías, Associate Lawyer of the Distribution and Franchise Department of JAUSAS.

Download the chapter The effects of defective pre-contraactual informarion in the franchise relationship. A disruptive view by clicking here.