The Legal Nature of Hotel Management Contracts
The hotel management contract is not defined by a special law in Georgia — it is built on the general institutions of civil legislation, and its natural framework is the contract of mandate. Under the contract of mandate the mandatary is obliged to carry out one or several acts entrusted to it in the name and at the expense of the mandator. For a hotel this means that the managing operator conducts the hotel's daily business — sales, staff, procurement, marketing and operational decisions — in the name and at the expense of the owner (the proprietor or investor).
This construction also determines the distribution of responsibility: the operator acts in the name of the mandator, that is, in the owner's interests, and precisely for that reason the law requires of it the provision of information and accountability. In addition, some projects are enriched with a joint-activity layer: under the contract of joint activity (partnership), two or several persons undertake to act jointly to achieve common economic or other purposes by means defined in the contract, without creating a legal person — with such an arrangement the owner and the operator find themselves in a common economic interest.