When drafting a contract, one of the essential clauses to include is the understanding that the agreement is personal to the parties involved. This clause is typically found in the introductory or recital section of the contract and helps to establish that the agreement is not transferable to any third party without the express written consent of all parties involved.
The phrase “personal to the parties” means that the agreement is specific and unique to those who have entered into the contract. It cannot be assigned or transferred to any other person or organization, even if they are affiliated with one of the parties involved. This clause is important because it helps to ensure that the parties are committed to the agreement and that they are willing to fulfill their obligations under the terms of the contract.
Furthermore, including this clause in a contract helps to protect the interests of all parties involved. For example, if one party were to assign their rights or obligations under the contract to a third party without the other party`s consent, it could potentially harm the other party`s interests. The third party may not have the same level of commitment or resources to fulfill the obligations under the agreement, which could result in a breach of contract.
In addition, the clause also helps to establish that the parties have a fiduciary relationship with each other. A fiduciary relationship is a legal relationship where one party has a duty to act in the best interest of the other party. By including this clause, it is clear that the parties have a fiduciary duty towards each other. This ensures that both parties will act in good faith towards each other, putting their interests in the forefront and maintaining the sanctity of the agreement.
To conclude, the clause “personal to the parties” is an essential component of any contract. It helps to establish that the agreement is unique to the parties involved and cannot be assigned or transferred to any third party without the consent of all parties. By including this clause, it protects the interests of all parties involved and ensures a fiduciary relationship between the parties. When drafting a contract, it is crucial to include this clause to establish the legal standing of the agreement and protect the interests of all parties involved.