If companies in joint ventures and “partnership agreements” want to make it clear that they do not want to create a legal partnership or agency, you will see contractual terms like this: a clause on the relationship between the parties describes the relationship between the parties as a result of the agreement. Or, more often, it is clear that there is no special relationship between the parties (no partnership or employee/employer relationship, for example. It is often a non-partnership clause or a non-affiliation clause. The same law governs all legal partnerships. Two or more companies can wrongly forge partnerships as easily as individuals could. Most companies do not want partnerships or agency agreements. If, after the contract is signed, the parties behave as they are in partnership and comply with the requirements of the Partnership Act, contract law will not escape this conclusion. The purpose of the clause is to avoid the consequences of an unwanted legal relationship. if. For example, a contract, obligation or “act” would result in a degree of dependency, partnership or joint venture; in common law countries, such circumstances can create an undesirable legal structure with unwanted obligations (financial or fiscal). This imposes important “loyalty obligations” on the agent, such as the obligation to disclose all conflicts of interest and the obligation to subordinate the agent`s own interests to those of the other party. However, a contractual refusal of the existence of such a report or fact is not such as to determine the legal effect and, at the same time, to ascertain whether the adverse report is realistic.
By law, partnerships are formed automatically if the requirements of the Partnership Act are met. If the parties behave in a way that creates a partnership, the full consequences of a partnership will result. As a general rule, a different clause for “independent contractors” is unnecessary. One of the provisions that one party cannot represent the other is of limited use. No authority. A more valid clause would be to expressly provide that the contract does not implicitly confer a power or power of one party to act on behalf of the other party. For the agency doctrine of “obvious authority” can apply. According to this doctrine, a person is bound by the actions of another agent, if the former, after learning of these acts, has behaved tacitly as an entity (obvious) or must be presumed (implicitly) to accept the consequences of such acts (from his apparent agent). An argument to support contrary intentions is reflected in the following sentence of an “independent contractors” clause. However, since this provision is not also intended for independent third parties based on the agents` actions, its effectiveness is limited to the internal relationship between the “manifest client” and his “agent”: the partnership and agency clauses (or “agency clauses”) in contract law refuse the existence of a partnership or agency between the parties instead of authorizing them.