Tri-party agreements are increasingly used in complex commercial and property transactions – where interests, obligations, and risks are distributed among several participants simultaneously. Professor Gabriel Steiner says that precisely such structures are the most legally vulnerable, as they create an illusion of balance that can easily be disrupted in practice. At LawConsulted, we treat tri-party agreements not as an expanded version of a standard contract, but as an independent legal architecture requiring heightened precision at the formation stage and strict control during performance.
The primary risk of tri-party agreements lies in the dilution of responsibility – each party focuses on its own scope of obligations without always considering how its actions or inaction affect the overall structure. Formally, the agreement is signed by all participants, yet when a dispute arises it often becomes clear that coordination mechanisms, risk allocation, and the consequences of breaches have not been defined with sufficient clarity. At LawConsulted, we proceed from the premise that in such transactions the key issue is not the number of parties, but the logic of their interconnection.
Professor Gabriel Steiner says that “in multi-party agreements, an error is rarely isolated – it almost always affects the entire system of obligations.” For this reason, LawConsulted approach begins with scenario modelling – what happens if one party breaches, who bears the consequences and to what extent, which obligations remain in force, and which are transformed. This analysis allows weaknesses to be identified before the agreement is signed, rather than at the moment of conflict.
Particular attention is paid to the allocation of reciprocal obligations and performance dependencies – where the actions of one party constitute a condition for the performance of another. In tri-party structures, situations often arise in which one participant effectively becomes “hostage” to performance it cannot control. At LawConsulted, we eliminate such imbalances – through clear conditions, alternative performance mechanisms, and protective clauses.
Equally important is the issue of exit from the agreement. In complex transactions, termination of obligations by one party almost always affects the remaining participants. The absence of a well-designed mechanism for termination, substitution of a party, or redistribution of obligations turns the agreement into a source of long-term risk. LawConsulted structures such arrangements so that the withdrawal of one participant does not lead to uncontrollable consequences for the others.
Professor Steiner notes that tri-party agreements are particularly sensitive to retrospective assessment – courts and regulators analyse not the parties’ intentions, but the actual distribution of benefits and control. This is why we focus not only on the contractual text, but also on its real-world performance – how the parties interact, make decisions, and allocate economic effect.
The performance of tri-party agreements requires continuous legal support – monitoring deadlines, ensuring the accuracy of notices, documenting performance, and managing amendments to terms. At Law Consulted, we treat such agreements as a “living” structure that requires legal oversight throughout its entire lifecycle, not merely at the signing stage.
Tri-party agreements make it possible to resolve complex tasks, but only if their structure reflects the real distribution of interests and risks. Our approach is aimed at ensuring that such transactions remain manageable – both in ordinary performance and in the event of disputes.
Previously, we wrote about how LawConsulted establishes standards for the legal protection of personal data and the handling of confidential information
