Third Party Agreements Clause

This example clause completely excludes the implementation of the Third Party Rights Act. When entering into the contract, you should take full advantage of due diligence by reducing and taking into account your risks. Their agreement should be structured according to the extent and nature of the relationship between third parties. Provisions relating to the rights and obligations of the parties, performance standards, contractual value, qualifications of goods/services, deadlines, insurance, secrecy and privacy, intellectual property and protection of personal data, law and jurisdiction, obligation to comply with all applicable international rules and standards, and your company`s ethics and compliance program, as well as all other contractual conditions, must be clear and clear and presented in a manner that leaves no doubt. The authorization of third-party rights under a contract increases the vulnerability of the contracting parties: they could be sued by anyone who benefits from the contract. The employer`s lawyers will often respond with „Ah,” but this is only the case to the extent that these obligations „concern the performance of the work,” so the contractor does not have to worry.” Does this do the trick and solve the problem correctly? No, unfortunately, not if we look more closely at the specific commitments of these agreements. Your company has followed a comprehensive and costly procedure to analyze and manage the risks of third parties in order to reach the conclusion of the contract. One of the fatal mistakes of a contract is to give prior approval to a third party, to assign its responsibilities and commitments to a complete stranger, whose company may never have valued much less. You may think that you already have a strong compensation and penalty clauses for service outages and failures, but such provisions cannot be sufficiently deterrent to prevent the designation of a fourth that could expose your business to various damages that might not be repaired by financial compensation such as reputation loss and administrative penalties. Therefore, ensure that a clause prohibits any type of transfer or subcontracting of the rights, responsibilities and debts of third parties, in whole or in part, without the prior written consent of your company.

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