A tripartite agreement is a legal document that is signed between three parties. It is often used in different types of contracts to ensure that all parties involved are aware of their responsibilities and obligations. The agreement can be mandatory or optional, depending on the situation.
In the real estate industry, a tripartite agreement is a common practice. It is often used when a purchaser is buying a property that is under construction. The agreement is signed between the buyer, the developer, and the bank. In this case, the bank is providing the loan to the purchaser, and the developer is responsible for completing the construction work.
The tripartite agreement in this scenario is mandatory as it protects the interests of all parties involved. The agreement ensures that the purchaser gets the completed property as per the agreed specifications, the developer gets the payment from the bank, and the bank gets the assurance that the property is legally free from any encumbrances.
On the other hand, in situations where a tripartite agreement is optional, it may still be advisable to sign one. For example, if a freelancer is hired by a client to work on a project, they may consider having a tripartite agreement with the client and the platform through which they were hired. In this case, the agreement can outline the responsibilities of each party, the payment terms, and the intellectual property rights.
Overall, a tripartite agreement is not always mandatory, but it can be beneficial in many situations. It can help to prevent any disputes that may arise between the parties in the future. However, it is essential to consult a legal expert to ensure that the agreement is drafted correctly and covers all the necessary aspects.