The tripartite agreements describe the different guarantees and contingencies between the three parties in the event of non-payment. Once these agreements are established, all parties agree that the original employment contract A) will be transferred to the new employer and B) that the contractual relationship with this first employer will be terminated without compensation or specific procedure. Tripartite agreements are usually signed for the purchase of units in projects under construction. In particular, three-party mortgage contracts become necessary if the money is lent for real estate that has not yet been built or improved. Agreements resolve potentially conflicting claims about the property if the borrower – usually the future owner – is late or perhaps even dying during construction. Two frequent cases in which tripartite agreements have proven useful are listed below: « In the leasing sector, tripartite agreements may be concluded between the lender, the owner/borrower and the lessee. These agreements usually stipulate that if the owner/borrower violates the non-payment clause of the loan agreement, the mortgage lender/lender becomes the new owner of the property. In addition, tenants will then have to accept the mortgage/lender as the new owner. The agreement also prevents the new landlord from changing the tenants` clauses or provisions, » Bulchandani adds.
But then again, all this can change in a subtle but important way depending on the country. He also points out that, while the idea is simple at the heart of tripartite agreements, the greater impact on internationally expanding companies is far from being the case. Last but not least, all this underlines the importance of cooperating with the right partner organization in the context of international expansion. You can bring your ideas and expertise so that you can focus on these kinds of problems, while focusing all your attention on driving the business you`ve invested in. If you`re considering expanding your global workforce, you need to make sure you`re choosing the right legal and compliance structures for your business. In some cases, it may be useful to start a business abroad. .