Tripartite agreements — also known as tri-party agreements — are legal agreements or contracts between three individuals or parties. These agreements can be a useful tool when setting up a tripartite employment relationship to grow your international workforce.
In this article, we explain everything you need to know about tri-partite agreements, including the precise meaning of ‘tripartite agreement’, when your company should consider using one, the risks of not using one and the key terms to include in such an agreement.
Please note, this article provides general information. You must seek professional legal advice to determine whether a tripartite agreement is the right choice for you.
Consider a regular contract or agreement: One person agrees with someone else, to do something in return for an item of value (called ‘consideration’, in contract law). One of the most common forms of agreement is an employment agreement or contract. In the normal case, we would expect an employment contract, sometimes called a ‘contract of service’, to be between between two individuals only. For example, Mr Justice Clarke, Chief Justice of the Supreme Court of Ireland had this to say about tripartite employment agreements:
Nevertheless, the law has recognized the existence and permissibility of these agreements with three individuals or ‘parties’: These are known as tripartite — literally ‘tri party’ — agreements.
An example of a tripartite agreement is ‘novation’. In novation, rights and obligations under the original contract are transferred from the original party, to a new third party. All parties must consent to novation.
As mentioned, tripartite agreements can be applied in a range of contexts such as employment contracts and novation.
See some sample tripartite agreements in other contexts below:
In this video a proposal to use triparty agreements to coordinate action between banks, community investors and developers is discussed.
