What is Tripartite Agreement?
A tripartite agreement is a legal documents which binds three parties to the contract and laws down the obligations, rights and responsibilities of all the parties. This kind of agreement resolves the potential claims or conflicts having clearly laying down the clauses concerning despite resolution,
representations, notices, and so on. Making a third party as a party to contract serves various advantages in situations where mutual agreement is required such as mortgages, charges or any agreement involving encumbrances, performance of services, etc. This agreement lays down the title and subject matter of the contract between all the three parties and perspectives of all parties are stated with respect to the approval, specifications and set values.
1. To avoid future conflicts - having a third party to act as a confirming party avoids possible future conflicts.
2. Removes difficulties - The third party who was indirectly related to the agreement, now being party to the agreement would not be able to take stand that he is unaware of any such transaction.
3. Clarity and genuineness of transactions - This agreement can provide clauses concerning the dues and transactions between the seller and the third party. Even the financial institutions are more inclined to advance loans in case of genuine agreements.
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