Three-Party Agreement

It seems that it has recently become a recurring issue in the revision of amendments to construction contracts that the contractor accepts all the employer`s commitments, commitments and risks within the framework of agreements relating to the execution of the works, as if these obligations were set out in the construction contract. Typical third-party contracts may include a lease agreement or modification license agreed with the employer`s lessor or a financing agreement with a bank. An obvious example is timing. A modification license or lease often involves the obligation for the tenant to obtain that the work be completed on a specific date or on a specific date after the conclusion of the contract. What does it do if the work goes beyond this date? As part of a lease agreement, this may allow the lessor to terminate the tenant`s right to carry out the work. However, the contractor`s obligations with respect to the date of completion of the work are clearly defined in the contract particulars and there is a mechanism in the construction contract that clearly provides that in the event of an event allowing the contractor to extend the deadline, the completion date is postponed accordingly. According to the construction contract, the only obligation for the contractor is to pay CDs and nothing else, so the late contractor also takes the invoice if the modification license is terminated? Tripartite agreements are usually signed for the purchase of units in projects under construction. The employer`s lawyers may argue that the contractor participated in the “design phase” of a third-party contract. Although the holder may have had some influence with regard to the attached technical documentation, for example. B an authorization for modification, it is rare that he has participated in the negotiation and development of legal and operational provisions. According to experts, tripartite agreements have been concluded to help buyers acquire financing from banks against the project to buy a house by a real estate developer.

There are many problems that lie around in agreements with third parties that can be imposed on contractors. Some may be obvious, but others may be hidden and may not be immediately obvious. A more effective approach is for the employer to identify the obligations that it actually needs to meet on the part of the contractor and to transmit them only to the modification plan. However, in our experience, it is rare for this exercise to be carried out – time, work and costs are dissuasive, so the employer simply passes on the entire third-party contract to the wholesale trade. For the contractor, the detection of potential conflicts or additional obligations is such as the search for a needle in a haystack. Is there a priority clause (for example. B determine which contract prevails in case of conflict between them) solve the problem? Not necessarily. There may be obligations imposed on the contractor under a contract with third parties that are not necessarily contrary to the obligations set out in the construction contract, but that complement them. For example, a lease may include an obligation to perform the work “to the satisfaction of the lessor”. Under the construction contract, the contractor is required to perform the work according to the standard required by the construction contract, no more and no less. What else could the owner`s expert say? The conditions set out in such agreements can be complex and therefore difficult to understand.

It is advisable that buyers seek the help of legal experts to look into the document….

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