Consortium Agreement Definition In Business

Airbus Industries was founded in 1970 as a consortium of aerospace manufacturers. The maintenance of production and engineering assets by partner companies has made Airbus Industries a sales and marketing company. [2] This agreement has led to inefficiencies due to the inherent conflicts of interest faced by the four partner companies; they were both shareholders and subcontractors of the consortium. The companies cooperated in the development of the Airbus range, but they monitored the financial details of their own production activities and tried to maximize the transfer prices of their assemblies. [3] In the Polish legal system, the legal nature of the consortium agreement is disputed. According to the dominant approach, a consortium is a different form of cooperation than a civil partnership between economically independent companies that are already operating in the market for the implementation of a specific enterprise that is a segment of the regular activities of these enterprises, based on an unspecified contract and characterized by a temporary nature, minimization of institutionalization and the absence of separate ownership. , the need to clarify how the parties participate in the joint venture and the intention not to create a “community” with part interests (the partnership itself). According to this approach, the partnership agreement, despite the very broad formula of a civil partnership for companies that commit to cooperating in a certain way to achieve a common economic objective (which is a common element for both types of contracts), is not to exploit all forms of cooperation and automatic qualification of consortium contracts, because partnerships are not allowed. [8] The joint venture will have its own bank account.

For a consortium, the parties could identify a single bank account and redistribute funds based on their invoices. However, an employer may be pragmatic and agree to pay directly into the bank accounts of each of the unionized partners. Global and multiple liability does not result in additional exposure and facilitates the life of the contractor. The money will be made available to the parties more quickly, without wasting time with additional bank transfers. For the employer, it is important to understand the limits of the consortium leader`s power. The employer should avoid asking for immediate answers when the consortium leader does not have prior authorization and his partner is absent.