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WiseOwl58, Attorney
Category: Business Law
Satisfied Customers: 3684
Experience:  Experienced business lawyer.
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We have an agreement with one corporation that has a partnership

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We have an agreement with one corporation that has a partnership with several other companies, which each is a separate corporation. The question we have is whether or not the agreement we have with the one corporation automatically allows the privileges we give the one corporation, the same privileges with all the others that they are partners with?

The agreement we have is with only one corporation who’s name has been omitted below, which their structure is explained below.

“ The partnership story of [Omitted] is its heart and soul. It is our fundamental belief – evidenced by our success – that our business model, based upon our concept of retained equity, is our true difference. We are NOT a franchise system, but we are partnership network.”

It was not our intentions to give the same privileges to all their partners, and we specifically told them this when negotiating the agreement that each of the distinct corporations would need to pay for a separate provider agreement with us, if they wanted one.

Our agreement is purely between our corporation and their corporation, and no others. Are we correct in assuming that our agreement is only with one entity, and not with any of their separate corporations that have partnered up with?
Yes, you are correct in your interpretation of the contract that the only party that has the rights and privileges that your company extended is to the specific company with which you have a contract.

The only way it could extend to the partner companies if the agreement that you signed with the first company says that the counterparty company can assign the agreement to its partners. If it does not say that, and you did not do any kind of agreement with the partner companies, then the partner companies to not have any of the rights that you gave to the first company that you signed the contract with.

Again, the key is in the assignment provision. If it says they cannot assign the contract, then only one party has the right.

Good luck to you. I wish you all the best.
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Customer: replied 5 years ago.

In regard to this same issue they replied back with the following comments below.

[Omitted] is the parent company of 24 wholly owned subsidiaries, one of which is [Other corporation’s name and has been omitted]. Each subsidiary is a separate corporation, and each has their own federal ID number. Since all the subsidiaries are wholly owned and roll up under one parent company, for federal income tax purposes we file one consolidated tax return.

I understand the confusion this sometimes causes. With many of our vendors, including Red Cross and APSP, we have one agreement covering [Omitted] and it's subsidiaries. Could we amend the current agreement we have with you to accomplish this same thing? END OF THEIR COMMENT

This identical issue came up in regard to only one company they said they had a relationship with prior to the agreement being signed, and we told them then they would need a separate agreement and fee to be paid with the other company. The current agreement has no assignment provision in it.

Do we have the right to require that each wholly owned subsidiary obtain a separate agreement with us if they want the same right as their Parent company?

Yes, from a legal standpoint you are only in priority of contract with Parent Company, and only the.parent company has any rights under the agreement.

Therefore, you must make a separate agreement with each of the subsidiaries or else give the Parent the right to assign those.rights to the subsidiaries which you would do by an amendment to the original agreement with the Parent.

You may consider charging them or requiring some other concession for making these additional rights available to.the subsidiaries.

Good luck.
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Please review the answer that I have given you and rate it a 3, 4 or 5 so that we can close out this question and I can get credit for the answer I have given you.

It has been a pleasure working with you. Please feel free to call on me again and let me know if anything else comes up.

Thanks, XXXXX XXXXX the best to you.


Customer: replied 5 years ago.
I had given you Excellent Service ratings. Please let me know if for some reason they are not showing on your side.
Thank you very much. I sincerely XXXXX XXXXX
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