Conflicting agreements: Overview, definition, and example
What are conflicting agreements?
Conflicting agreements refer to situations where two or more contracts or agreements contain terms that are inconsistent, contradictory, or mutually exclusive. These conflicts arise when the obligations, rights, or duties outlined in one agreement interfere with or contradict those in another agreement, making it unclear how to fulfill both sets of obligations without breaching one or more of the agreements. Conflicting agreements can create legal challenges, especially when one party is expected to perform actions that cannot be done simultaneously or in accordance with both agreements.
For example, a company might enter into two contracts with different suppliers, both promising exclusive rights to supply the same product, which would create a conflict between the agreements.
Why are conflicting agreements important?
Conflicting agreements are important because they can lead to legal disputes, confusion, or financial losses. When agreements conflict, it may be difficult to determine which obligations take precedence, potentially resulting in one party breaching a contract or facing penalties. In business, conflicting agreements can undermine trust, disrupt operations, and cause delays. For legal professionals, identifying and resolving conflicts between agreements is crucial for protecting clients' interests and ensuring that all contractual obligations are met without conflict. Resolving conflicts early can prevent litigation and help maintain smooth business relationships.
Understanding conflicting agreements through an example
Let’s say a company agrees to lease a building for five years with a clause that grants the tenant the option to sublease the property. Later, the company signs a second lease agreement for the same space with a different tenant, stipulating that the building cannot be subleased. These two agreements create a conflict because the company cannot allow subleasing as stated in one agreement while also preventing subleasing in the other agreement.
In another example, a business enters into two contracts with two different vendors to provide the same product, but each contract includes an exclusivity clause. The business finds itself in a situation where it cannot legally fulfill both contracts, as each vendor is promised exclusive rights to supply the product, leading to a conflict between the agreements.
An example of a conflicting agreements clause
Here’s how a conflicting agreements clause might appear in a contract:
“In the event of a conflict between the terms of this Agreement and any prior or subsequent agreements with other parties, the terms of this Agreement shall prevail unless explicitly stated otherwise in writing. Both parties agree to resolve any inconsistencies promptly to avoid legal or operational disruptions.”
Conclusion
Conflicting agreements can create significant challenges for businesses and individuals, leading to potential breaches, legal disputes, or operational delays. Understanding and identifying conflicts in contracts before they become issues is essential for ensuring smooth operations and legal compliance. When conflicts arise, it is important to address them through amendments, renegotiations, or clear clauses that outline which agreement takes precedence, helping to avoid confusion and safeguard the interests of all parties involved.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.