Relationship of the parties (no employment, partnership or agency) clauses

This guidance note explores the critical role of “relationship of the parties” clauses in commercial agreements, emphasising their function in defining the parties’ legal positions and limiting unintended fiduciary, employment, or partnership obligations. Practitioners must understand the strategic importance of these clauses to mitigate risks associated with misclassification and legal exposure. The document provides detailed insights into the scope and drafting of such clauses, with reference to key case law and regulatory frameworks.

Related Documents

• Purpose of this boilerplate clause
• Key concepts explained
• Key drafting considerations for this boilerplate clause
• Possible approaches

Essential Insights

• Assess how clauses exclude employment, partnership, agency, or fiduciary relationships to limit legal exposure.
• Consider the implications of recent High Court rulings on employment status and contractor risks.
• Recognise the difference between contractual terms and how courts may determine the actual relationship.
• Understand why disclaimers alone may not prevent deemed employment or fiduciary duties under law.
• Tailor clauses carefully to the nature of the agreement, balancing inclusions and exclusions strategically.
• Explore positive versus negative clause phrasing and its impact on the parties’ legal positions.