Nature of Energy Performance Contracts (Energy Service Contracts)

Energy Service Contract is an important method for energy saving. While taking some degree of risk, Energy Service Companies implement the energy-saving projects in the form of energy performance contracts for energy consumers (clients). This kind of contracts enjoy some new, subtle and different features. The question is whether this type of contract can be classified as a new contractual form? If not under which type of existing contract forms are they classified? In this paper, the framework of shared savings and guaranteed savings contracts as the main types of energy performance contracts is reviewed. Documents issued by the Ministry of Petroleum are compared to some certain contracts, including sales, promise of reward, hire-purchase and partnership; it is concluded that this specific kind of contract, is not compatible with any of the definite contract types mentioned above. Hence these contracts should be recognized under the principle of sovereignty and freeness of wills, Article 10 of the Civil Code. it is argued that these contracts are not marred by the risk of loss, so they are not defying the specific terms of law. it is argued that the structure of shared saving contracts is the same as of the reward contract under the definite contracts