Clause guide
No Third-Party Beneficiaries Clause clause: meaning, risks, and what to negotiate
Says that only the contracting parties, not outsiders, may enforce the agreement unless expressly stated otherwise.
What it means
This clause helps prevent non-parties from claiming rights under the contract or trying to enforce its terms.
Common risks
- • Without it, third parties may try to assert contract rights.
- • The clause may accidentally exclude intended beneficiaries.
- • It may conflict with affiliate or subcontractor provisions.
What to check before signing
- • Are any third parties meant to have rights under the agreement?
- • Does the clause match indemnity or affiliate provisions?
- • Are intended exceptions stated clearly?
Negotiation ideas
- • Use a standard no-third-party-beneficiaries clause.
- • Add explicit carve-outs for intended beneficiaries if needed.
- • Check consistency with affiliate, indemnity, and insurance wording.
Example clause
“Except as expressly stated in this Agreement, no person or entity that is not a party to this Agreement shall have any right to enforce any of its terms.”
Frequently asked questions
What is a third-party beneficiary?
It is someone who is not a party to the contract but may claim a right to benefit from or enforce it.
Related clauses
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