No influence: Overview, definition, and example
What is no influence?
A no influence clause states that one party cannot unduly pressure, manipulate, or control another party’s decisions in a business agreement. This is often used in contracts to confirm that decisions are made independently and without external coercion, ensuring fairness and integrity in negotiations.
For example, in a contract between a company and its suppliers, a no influence clause might clarify that the company did not pressure the supplier into agreeing to specific terms.
Why is no influence important?
A no influence clause helps prevent claims of unfair pressure or coercion in business agreements. It ensures that all parties enter into a contract freely and with full understanding of the terms.
This is particularly important in contracts involving financial transactions, partnerships, and supplier agreements, where one party might have more bargaining power than the other. Without this clause, a party might later claim they were forced into the agreement, leading to legal disputes.
Understanding no influence through an example
Imagine a small business negotiating a supply contract with a large corporation. The corporation wants to ensure that the supplier willingly agreed to the pricing and delivery terms. A no influence clause in the contract confirms that the supplier made its decision independently and without unfair pressure.
In another example, an investor agrees to fund a startup but includes a no influence clause stating that their investment does not give them control over the startup’s business decisions. This reassures the startup founders that they retain full decision-making authority.
An example of a no influence clause
Here’s how a no influence clause might look in a contract:
“Each Party acknowledges that it has entered into this Agreement voluntarily, without coercion, undue influence, or pressure from the other Party, and after seeking independent legal and financial advice as necessary.”
Conclusion
A no influence clause protects businesses by ensuring that agreements are made freely and fairly. It helps prevent disputes over claims of pressure or coercion and ensures all parties understand that they are making independent decisions.
Including a no influence clause in contracts provides legal clarity and reinforces trust between business partners.
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.