No inconsistent agreements: Overview, definition, and example
What is no inconsistent agreements?
No inconsistent agreements refers to a contractual provision where one party agrees not to enter into any agreements or commitments that would conflict with, contradict, or undermine their obligations under the current agreement. This clause ensures that the party’s commitments remain consistent and do not create legal or practical conflicts with the terms of the existing contract.
For example, a company signing a non-compete agreement with a partner may include a no inconsistent agreements clause to prevent the partner from entering into agreements with competitors that violate the terms of their partnership.
Why is no inconsistent agreements important?
The no inconsistent agreements clause is important because it protects the integrity of the existing contract by preventing actions or commitments that could create conflicts or disputes. For businesses, this clause provides assurance that the other party will not act in ways that undermine the agreed-upon terms or create competing obligations.
Including this clause in agreements helps minimize risks, maintain trust, and ensure alignment between the parties’ obligations and responsibilities.
Understanding no inconsistent agreements through an example
Imagine a technology startup enters into an exclusive licensing agreement with a software developer. The agreement includes a no inconsistent agreements clause, ensuring the developer does not grant licenses to other companies for the same technology during the exclusivity period. This protects the startup’s investment and prevents market competition from conflicting agreements.
In another example, a publishing company signs a contract with an author for exclusive rights to publish their book. The author agrees to a no inconsistent agreements clause, ensuring they do not sign additional publishing agreements for the same book with another company.
An example of a no inconsistent agreements clause
Here’s how a no inconsistent agreements clause might look in a contract:
“Each Party represents and warrants that it has not entered into, and agrees that it will not enter into, any agreement, commitment, or arrangement that conflicts with or is inconsistent with its obligations under this Agreement. Any such inconsistent agreement shall be deemed null and void to the extent of the inconsistency.”
Conclusion
The no inconsistent agreements clause safeguards the terms of a contract by ensuring that parties do not create conflicting obligations or commitments. It promotes clarity, trust, and accountability in contractual relationships.
By including a no inconsistent agreements provision, businesses can protect their interests, avoid disputes, and ensure that all parties remain aligned with the contract’s objectives.
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.