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A “Consortium Null and Void Agreement” is essential when companies decide to participate jointly in a tender under a “Consortium Agreement.” This agreement is crucial if their offer is rejected, the tender is canceled, or another consortium is awarded the tender’s contract. In such scenarios, there may be no reason for the parties to maintain their Consortium Agreement.

Purpose of the Consortium Null and Void Agreement

The primary purpose of this agreement is to release the parties from their foreseeable responsibilities and liabilities. It is especially important if the original Consortium Agreement does not provide an appropriate termination or cancellation solution. By signing this agreement, the involved parties can avoid potential disputes and legal complications.

When to Use the Agreement

We recommend the Consortium Null and Void Agreement under specific circumstances:

• The offer submitted by the consortium is rejected.
• The tender is canceled.
• The tender’s contract is awarded to another consortium. In these cases, maintaining the Consortium Agreement may be unnecessary and burdensome for the parties involved.

Main Components of the Agreement

This agreement should clearly outline the conditions under which it becomes effective. It should state that the Consortium Agreement is void due to the tender’s rejection, cancellation, or award to another consortium. Additionally, it should specify that all parties have fulfilled their initial responsibilities and liabilities. This clarity helps prevent misunderstandings and future disputes.

Conclusion

A Consortium Null and Void Agreement is a practical solution when a consortium’s tender is unsuccessful. It ensures that all parties are free from their obligations and liabilities, preventing potential conflicts. Understanding when and how to use this agreement is a crucial matter for tender joint companies.

Check out more pages of our website for related content:

• Consortium Agreement
• Project Consortium Agreement
• Termination Agreement
• Consortium vs Joint Venture vs SPV: A Comprehensive Guide

References:

• International Chamber of Commerce (ICC) – ICC Model Consortium Agreement (Construction). Provides a well-recognised template for consortium agreements in large-scale construction/infrastructure projects, covering governance, risk-sharing and liability.
• National Institute of Allergy and Infectious Diseases (USA) – Sub-awards (Consortium Agreements) for Grants SOP.