The Obligations of the Parties in the Contract for Transfer of Technology

Transferor’s duty to make the receiver capable of using subject matter of the contract (i.e., technology) is an essential element of the purpose of the contract. For this reason, the duty to transfer shall be treated as an essential contractual duty of the transferor. With due consideration of the general principles of contract law, usage employed in the market of technology transaction and relevant laws of certain countries actively engaged in this market, a number of significant results come into view. First, this obligation constitutes the core of the transferor’s contractual obligations. Second, this duty shall be regarded as an implied term, which does not need to be agreed in express. Third, to perform this undertaking, the transferor shall also be impliedly obliged to warrant the sufficiency and adequacy of the technology. Analysing the warranty obligation shows that only some parts of this duty shall be treated as implied term, and the others need to be agreed by the parties in express. Furthermore, the present study shows that the receiver’s main concurrent obligation is to pay money in exchange for the duty to transfer. This obligation can be performed in three lump sump payment, running royalty payment, and a combination these two. When the second method is used, it will serve the receiver because it will correlate the transferor’s interests into efficient performance of the technology. In addition, duty of confidentiality, territorial restriction, defence of the aggrieved party against any party’s rights and claims are further obligations imposed on the parties under this contract, though it would be difficult to treat them as the main contractual obligations.