Contracts and third parties: what are related contracts?

nila44

Traditional compendia on Contract Law usually preamble with the teaching that the contract generates effects only between the parties.

In fact, the typical effects of the vast majority of contracts bind only the “parties”, as subjective centers of interests, and leave everyone else, usually called “third parties”, immunized from these effects[1].

This typical effective projection, however, does B2B Lead not allow us to assume that between the parties and third parties there is an antagonistic or dichotomous disposition, so as to recognize and attribute any and all legal effects only to the parties and, ad contrario sensu, exclude any and all effect on third parties.

In addition to the parties to contractual legal relationships, there are closer third parties and more distant third parties who, to different extents, can influence contractual relationships (namely, payment by an interested third party (article 304 of the Civil Code), stipulation in favor of third party (article 436 of the Civil Code), the actual promise of a third party (article 439 of the Civil Code), to name the most obvious examples).

On the other hand, if it is true to assume that the typical effects of the vast majority of contracts only bind the “parties”, this does not mean that some side or paracontractual effects cannot expand beyond the contract and reach so-called third parties.

In this regard, an important chapter of Contemporary Contract Law seeks to investigate the expansion and restriction of contractual effects beyond the parties and, also, beyond the legal transaction itself[2].

The topic of related contracts falls within this scope and will be the subject of this and our next columns in the Current Civil Law space.

II. What are linked contracts? How do they arise?
In another writing on the subject, we define the contractual coalition as “a plurality of contracts and contractual legal relationships that are structurally distinct, but linked, connected, which make up a single and the same economic operation, with potential consequences in terms of validity (through possible contagion of invalidities) and in terms of effectiveness (on topics such as default, the power of resolution, opposition to the exception of the unfulfilled contract, the scope of the arbitration clause, among others)”[3].

The coalition, far from arising from the brainy speculations of jurists, originates from market behavior, through which agents seek to enhance their interests through efficient contract management.



Practices of decentralization and increasing specialization segmented the elaboration, production and circulation of wealth beyond business societies. As a result, business activity to a considerable extent began to be developed through adequate contract management[4] and, in this context, related contracts are of relevant importance.