Subsidiary clause: Copy, customize, and use instantly
Introduction
A subsidiary clause explains how a contract applies to a parent company and its subsidiaries. It sets out whether subsidiaries are included in the contract’s benefits or responsibilities, making things clear and avoiding misunderstandings for everyone involved.
Here are subsidiary clause templates for different situations. Find the one that fits, customize it, and add it to your contract.
Standard subsidiary clause
This balanced clause binds subsidiaries to the same obligations as the parent company.
This agreement is binding upon and shall inure to the benefit of the parties and their respective subsidiaries, affiliates, successors, and assigns. Each party warrants that it has the authority to bind its subsidiaries to the obligations set forth in this agreement.
Limited subsidiary clause
This clause limits the scope of subsidiary obligations to specific provisions.
This agreement shall be binding upon and enforceable by the parties and their named subsidiaries solely with respect to [specific provisions, e.g., confidentiality, indemnification]. No other obligations shall extend to the subsidiaries unless expressly agreed in writing.
Exclusion of subsidiaries clause
This clause explicitly excludes subsidiaries from the agreement.
This agreement applies solely to the parties named herein and does not extend to their subsidiaries or affiliates unless expressly stated. No obligations or liabilities under this agreement shall be imposed upon or enforceable by any subsidiary of either party.
Joint liability subsidiary clause
This clause holds the parent company and its subsidiaries jointly liable.
The parties and their respective subsidiaries shall be jointly and severally liable for all obligations and liabilities under this agreement. Any breach by a subsidiary shall be treated as a breach by the parent company.
Subsidiary benefit-only clause
This clause allows subsidiaries to benefit from the agreement without being bound by its obligations.
This agreement shall extend the benefits of its terms to the subsidiaries of the parties but shall not impose any obligations or liabilities upon such subsidiaries unless explicitly stated in writing.
Future subsidiaries clause
This clause extends the agreement to subsidiaries formed after the contract is executed.
This agreement shall be binding upon and enforceable by the parties and any subsidiaries that are established or acquired after the effective date of this agreement, provided such subsidiaries are notified in writing and agree to be bound by the terms herein.
Opt-in subsidiary clause
This clause allows subsidiaries to opt in to the agreement at their discretion.
Subsidiaries of either party may opt in to the terms of this agreement by providing written notice to the other party. Upon such notice, the subsidiary shall be bound by and entitled to all rights and obligations under this agreement.
Cross-border subsidiary clause
This clause addresses subsidiaries operating in different jurisdictions.
This agreement shall apply to subsidiaries operating in jurisdictions outside the country of the parent company, provided that compliance with local laws and regulations is maintained. Any conflicts between this agreement and local laws shall be resolved in favor of local compliance.
Subsidiary indemnification clause
This clause includes a provision for parent company indemnification of subsidiaries.
The parent company agrees to indemnify and hold harmless its subsidiaries from any liabilities, damages, or claims arising out of their performance under this agreement, except in cases of gross negligence or willful misconduct by the subsidiary.
Subsidiary exclusion for performance clause
This clause excludes subsidiaries from performance-related obligations.
Subsidiaries of the parties shall not be required to perform any obligations under this agreement unless explicitly agreed in writing. All performance obligations shall remain the responsibility of the parent company.
Delegated subsidiary clause
This clause delegates specific obligations to named subsidiaries.
The parties agree that certain obligations under this agreement may be delegated to the named subsidiaries listed in Schedule A. These subsidiaries will be directly responsible for fulfilling the delegated obligations, and their actions shall be binding upon the parent company.
Carve-out subsidiary clause
This clause excludes specific subsidiaries from the agreement.
This agreement shall not apply to the subsidiaries listed in Schedule B. The excluded subsidiaries shall not be bound by, nor shall they benefit from, any terms or conditions of this agreement.
Subsidiary-specific obligations clause
This clause imposes unique obligations on specific subsidiaries.
While the parent company remains primarily responsible for fulfilling all obligations under this agreement, the subsidiaries listed in Schedule C shall be required to perform the specific tasks outlined therein. These obligations shall be binding solely on the identified subsidiaries.
Subsidiary liability waiver clause
This clause limits the liability of subsidiaries under the agreement.
No liability under this agreement shall extend to the subsidiaries of either party, except as explicitly stated in this agreement. The parties agree to hold harmless all subsidiaries from any claims arising out of the terms herein.
Subsidiary compliance clause
This clause ensures subsidiaries comply with the agreement’s terms.
The parent company warrants that its subsidiaries will comply with all applicable provisions of this agreement. Any failure by a subsidiary to comply shall be treated as a breach by the parent company.
Affiliate and subsidiary distinction clause
This clause distinguishes between affiliates and subsidiaries for clarity.
This agreement applies to subsidiaries of the parties only and excludes affiliates unless specifically named in writing. Subsidiaries are defined as entities where a majority ownership interest is held directly or indirectly by the parent company.
Parent company guarantee clause
This clause requires the parent company to guarantee subsidiary performance.
The parent company guarantees the full performance of all obligations undertaken by its subsidiaries under this agreement. Any default by a subsidiary shall be treated as a default by the parent company.
Subsidiary exclusion for disputes clause
This clause excludes subsidiaries from dispute resolution provisions.
Subsidiaries of the parties shall not be subject to the dispute resolution provisions of this agreement. All disputes arising under this agreement shall be resolved solely between the parent companies.
Multi-subsidiary coordination clause
This clause addresses coordination among multiple subsidiaries.
If multiple subsidiaries of either party are involved in fulfilling the terms of this agreement, the parent company shall ensure coordination among its subsidiaries to prevent delays or conflicts in performance.
Subsidiary succession clause
This clause addresses the treatment of subsidiaries in the event of ownership changes.
In the event a subsidiary is sold, merged, or otherwise ceases to be under the ownership of the parent company, the obligations and rights under this agreement shall no longer apply to that subsidiary unless agreed in writing by all parties.
Partial subsidiary inclusion clause
This clause limits the agreement to specific activities of a subsidiary.
This agreement applies to the subsidiaries of the parties solely for the purposes of [insert specific activities, e.g., "research and development"] and does not extend to their other business operations. Subsidiaries shall not be held liable for obligations outside the specified activities.
Operational subsidiary clause
This clause applies the agreement to subsidiaries directly involved in operations.
The terms of this agreement shall apply only to subsidiaries that are actively engaged in the operations directly related to this agreement. Subsidiaries not participating in such operations are excluded from any obligations or benefits under this agreement.
Regional subsidiary clause
This clause applies the agreement to subsidiaries in a specific geographic region.
This agreement shall bind and benefit subsidiaries located in [insert region, e.g., "North America"], while subsidiaries operating outside this region are excluded unless otherwise agreed in writing.
Non-binding subsidiary clause
This clause clarifies that subsidiaries are not bound by the agreement.
Subsidiaries of the parties are not bound by the terms of this agreement unless explicitly named and agreed to in a written amendment. No third-party claims shall arise against any subsidiary as a result of this agreement.
Performance-specific subsidiary clause
This clause binds subsidiaries only for performance-related obligations.
The parties agree that the subsidiaries listed in [Schedule/Appendix] shall be bound by the performance-related obligations of this agreement, including but not limited to [specific obligations]. All other obligations shall remain the responsibility of the parent company.
Subsidiary dispute exclusion clause
This clause excludes subsidiaries from liability in disputes.
Subsidiaries of the parties are not parties to this agreement and shall not be named in any disputes or legal actions arising under this agreement. Liability for any claims shall be borne solely by the parent companies.
Transitional subsidiary clause
This clause governs obligations during a transition period.
This agreement shall bind subsidiaries of the parties for a transitional period of [insert duration, e.g., "12 months"] following execution. After this period, all obligations and benefits of subsidiaries must be reassigned or terminated in writing.
Subsidiary responsibility clause
This clause assigns responsibility to specific subsidiaries for compliance.
The parent company warrants that the subsidiaries listed in [Schedule/Appendix] will comply with all terms of this agreement. Any non-compliance by these subsidiaries shall be treated as non-compliance by the parent company.
Subsidiary intellectual property clause
This clause extends intellectual property rights to subsidiaries.
Intellectual property rights and obligations under this agreement shall extend to the subsidiaries of the parties. Any use, development, or licensing by subsidiaries must comply with the terms outlined in this agreement.
Non-assignment subsidiary clause
This clause prevents the assignment of obligations to subsidiaries.
Neither party may assign its obligations under this agreement to its subsidiaries without prior written consent. Any unauthorized assignment shall be deemed invalid and unenforceable.
Financial subsidiary clause
This clause limits the financial liability of subsidiaries.
Subsidiaries of the parties shall not bear any financial liability under this agreement beyond the scope of their specific performance obligations. All other financial obligations shall remain with the parent company.
Subsidiary notification clause
This clause requires subsidiaries to be informed of their inclusion.
The parent company agrees to notify all subsidiaries bound by this agreement in writing within [insert timeframe] of execution. Failure to notify a subsidiary shall relieve that subsidiary of any obligations under this agreement.
Strategic subsidiary involvement clause
This clause includes only subsidiaries critical to fulfilling strategic objectives.
This agreement applies solely to subsidiaries identified as strategic partners in Schedule A. These subsidiaries are responsible for fulfilling the strategic obligations outlined in the agreement, and their performance shall be monitored by the parent company.
Subsidiary indemnification clause
This clause requires parent companies to indemnify their subsidiaries.
The parent company agrees to indemnify and hold harmless its subsidiaries for any claims, losses, or liabilities arising from the execution or performance of this agreement, except where the subsidiary’s own negligence or misconduct is involved.
Limited duration subsidiary clause
This clause binds subsidiaries for a specific period.
Subsidiaries of the parties shall be bound by the terms of this agreement for a duration of [insert time period], after which their obligations shall cease unless explicitly renewed in writing by the parties.
Subsidiary confidentiality clause
This clause extends confidentiality obligations to subsidiaries.
The confidentiality obligations outlined in this agreement shall extend to the subsidiaries of the parties. Each party agrees to ensure that its subsidiaries comply with these confidentiality provisions.
Subsidiary termination clause
This clause addresses the removal of subsidiaries upon termination of the agreement.
Upon termination of this agreement, all obligations and rights of the parties’ subsidiaries shall immediately cease unless otherwise agreed in writing. Any ongoing obligations must be reassigned to the parent company within [insert timeframe].
Independent subsidiary clause
This clause ensures subsidiaries act independently of the parent company.
Subsidiaries of the parties shall act independently in performing their obligations under this agreement. The parent company shall not interfere with or direct the actions of the subsidiaries unless explicitly authorized in writing.
Multi-tier subsidiary clause
This clause covers subsidiaries of subsidiaries.
This agreement applies to both direct subsidiaries of the parties and their lower-tier subsidiaries, as specified in Schedule B. The parent company shall ensure compliance by all applicable tiers of subsidiaries.
Exclusion of certain subsidiaries clause
This clause excludes subsidiaries based on specific criteria.
This agreement shall not apply to subsidiaries engaged in [insert specific activity, e.g., "regulated financial services"]. The parent company warrants that any excluded subsidiaries will not interfere with the performance of this agreement.
Subsidiary notification for disputes clause
This clause requires notifying subsidiaries about disputes impacting their obligations.
If a dispute arises under this agreement that affects the obligations of a subsidiary, the parent company agrees to notify the affected subsidiary within [insert timeframe] of the dispute being raised.
Subsidiary performance reporting clause
This clause requires subsidiaries to report performance to the parent company.
Subsidiaries performing obligations under this agreement must provide regular performance reports to the parent company at intervals of no less than [insert timeframe]. These reports shall be shared with the other party upon request.
Subsidiary-specific indemnity clause
This clause provides indemnity specifically for subsidiaries’ actions.
The parent company agrees to indemnify its subsidiaries for any liabilities arising from their performance under this agreement, provided that such performance was in accordance with the terms of this agreement and approved by the parent company.
Subsidiary opt-in clause
This clause allows subsidiaries to opt into the agreement.
Subsidiaries of the parties may opt into the terms of this agreement by providing written confirmation to all parties. Once opted in, the subsidiary shall be bound by all applicable provisions of this agreement.
Regulatory compliance subsidiary clause
This clause ensures subsidiaries comply with industry regulations.
Subsidiaries of the parties must adhere to all applicable regulatory and industry standards when performing obligations under this agreement. Any failure to comply will be treated as a breach of this agreement by the parent company.
Subsidiary revenue-sharing clause
This clause outlines revenue-sharing responsibilities for subsidiaries.
Subsidiaries of the parties involved in revenue-generating activities under this agreement shall allocate and share revenues in accordance with the percentages outlined in Schedule C. The parent company shall oversee the proper distribution of funds.
Cross-jurisdictional subsidiary clause
This clause handles subsidiaries operating in different legal jurisdictions.
This agreement shall apply to subsidiaries operating in jurisdictions where the obligations under this agreement are enforceable. The parent company warrants that such subsidiaries will comply with the applicable laws in their respective jurisdictions.
Subsidiary conflict resolution clause
This clause establishes procedures for resolving disputes involving subsidiaries.
In the event of a dispute involving a subsidiary’s obligations under this agreement, the parties agree to resolve the matter through direct negotiation with the subsidiary’s management before escalating to formal dispute resolution mechanisms.
Subsidiary subcontracting clause
This clause allows subsidiaries to subcontract obligations under specific terms.
Subsidiaries may subcontract their obligations under this agreement with the prior written consent of the parent company and the other party. The parent company shall remain liable for the subcontracted obligations.
Subsidiary exclusion for insolvency clause
This clause excludes subsidiaries in financial distress from obligations.
Subsidiaries currently under insolvency proceedings or identified as financially distressed are excluded from the terms of this agreement. The parent company warrants that such subsidiaries will not interfere with the performance of this agreement.
Subsidiary audit compliance clause
This clause ensures subsidiaries adhere to audit requirements.
Subsidiaries bound by this agreement must comply with periodic audit requirements to ensure adherence to the terms of this agreement. The parent company agrees to facilitate such audits and provide access to relevant records.
Subsidiary force majeure clause
This clause excuses subsidiaries from performance under certain conditions.
Subsidiaries of the parties are excused from performing their obligations under this agreement in the event of a force majeure event as defined in Section [insert section]. The parent company must notify the other party of the affected subsidiary’s status within [insert timeframe].
Subsidiary intellectual property use clause
This clause grants subsidiaries limited use of intellectual property.
Subsidiaries of the parties are granted a non-exclusive, revocable license to use the intellectual property specified in Schedule D for the purposes of fulfilling their obligations under this agreement. Unauthorized use by subsidiaries will result in termination of the license.
Subsidiary joint liability clause
This clause establishes joint liability between parent companies and subsidiaries.
The parent company and its subsidiaries shall be jointly and severally liable for all obligations under this agreement. Any breach by a subsidiary shall be treated as a breach by the parent company.
Subsidiary employee compliance clause
This clause ensures subsidiary employees adhere to the agreement’s terms.
The parent company guarantees that employees of its subsidiaries performing under this agreement are aware of and will comply with the terms of this agreement. Non-compliance by employees shall be treated as non-compliance by the subsidiary.
Subsidiary environmental compliance clause
This clause requires subsidiaries to meet environmental standards.
Subsidiaries involved in activities under this agreement must comply with all applicable environmental laws and regulations. The parent company agrees to provide oversight to ensure compliance and address any violations promptly.
Subsidiary non-competition clause
This clause restricts subsidiaries from competing with the other party.
Subsidiaries of the parties shall not engage in activities that compete with the business interests of the other party during the term of this agreement and for a period of [insert timeframe] thereafter. The parent company is responsible for enforcing this restriction.
Subsidiary notification of termination clause
This clause mandates notifying subsidiaries of agreement termination.
Upon termination of this agreement, the parent company must notify its subsidiaries of their release from obligations under this agreement within [insert timeframe]. Any failure to notify will result in continued liability for the parent company.
Subsidiary data protection clause
This clause ensures subsidiaries protect sensitive data.
Subsidiaries bound by this agreement must implement data protection measures consistent with the terms outlined in Section [insert section]. The parent company shall audit compliance and report any breaches immediately.
Subsidiary project-specific involvement clause
This clause limits subsidiary obligations to specific projects.
Only subsidiaries assigned to the projects outlined in Schedule E are bound by the terms of this agreement. The parent company agrees to ensure that unassigned subsidiaries will not interfere with the performance of the agreement.
Subsidiary brand usage restriction clause
This clause restricts subsidiaries from using the other party’s branding.
Subsidiaries of the parties are prohibited from using the other party’s name, logo, or branding in any form without prior written consent. Any unauthorized use will result in immediate termination of this agreement for the subsidiary involved.
Subsidiary dispute escalation tier clause
This clause defines tiers for escalating disputes involving subsidiaries.
Disputes arising under this agreement involving subsidiaries must first be resolved at the subsidiary level. If unresolved, the dispute will be escalated to the parent company’s management for final resolution within [insert timeframe].
Subsidiary shared resource allocation clause
This clause governs how resources shared by subsidiaries are handled.
Subsidiaries engaged in shared resource allocation under this agreement must adhere to the resource-sharing protocols outlined in Schedule F. The parent company is responsible for mediating any disputes over shared resources.
Subsidiary overlapping obligations clause
This clause clarifies how overlapping obligations among subsidiaries are managed.
If multiple subsidiaries are assigned overlapping obligations under this agreement, the parent company will designate a lead subsidiary to fulfill the obligations and coordinate efforts among the others.
Subsidiary inter-party collaboration clause
This clause requires subsidiaries of both parties to collaborate directly.
Subsidiaries of both parties must engage in direct collaboration for activities specified in Section [insert section]. The parent companies will provide oversight to ensure effective communication and adherence to the agreement.
Subsidiary security compliance clause
This clause mandates security measures for subsidiaries handling sensitive materials.
Subsidiaries responsible for handling sensitive materials under this agreement must adhere to the security protocols outlined in Schedule G. The parent company guarantees that all subsidiaries are trained in and comply with these protocols.
Subsidiary operational independence clause
This clause allows subsidiaries to operate independently within agreed parameters.
Subsidiaries of the parties may operate independently to fulfill their obligations under this agreement, provided that their actions remain within the scope of authority granted by the parent company in Section [insert section].
Subsidiary training compliance clause
This clause requires subsidiaries to complete training programs.
Subsidiaries performing obligations under this agreement must complete the training programs specified in Schedule H before commencing work. The parent company is responsible for ensuring compliance with this requirement.
Subsidiary financial reporting clause
This clause requires subsidiaries to provide financial reports related to the agreement.
Subsidiaries bound by this agreement must submit detailed financial reports to the parent company at regular intervals specified in Schedule I. These reports must be shared with the other party upon request.
Subsidiary relationship exclusivity clause
This clause restricts subsidiaries from working with competitors of the other party.
Subsidiaries engaged under this agreement are prohibited from entering into agreements with competitors of the other party for the duration of this agreement and for a period of [insert timeframe] thereafter. The parent company will enforce this restriction.
Subsidiary subcontractor management clause
This clause regulates the use of subcontractors by subsidiaries.
Subsidiaries performing obligations under this agreement may engage subcontractors only with prior written approval from the parent company and the other party. The parent company remains liable for all subcontracted work.
Subsidiary early termination clause
This clause allows early release of subsidiaries from obligations.
Subsidiaries may be released from their obligations under this agreement prior to its termination date upon written approval from both parties. The parent company must ensure that released subsidiaries do not interfere with the remaining obligations.
Subsidiary cross-party information sharing clause
This clause governs how subsidiaries share information with the other party.
Subsidiaries must share all relevant information related to the performance of this agreement directly with the other party, subject to the confidentiality terms outlined in Section [insert section]. The parent company will facilitate this information exchange.
Subsidiary performance monitoring clause
This clause requires ongoing monitoring of subsidiary performance.
Subsidiaries bound by this agreement must adhere to the performance metrics outlined in Schedule J. The parent company is responsible for monitoring and ensuring that subsidiaries meet these metrics.
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