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Tripartite Agreement India Law

A tripartite agreement refers to a legal agreement between three parties. In India, such agreements are commonly used in the real estate industry, particularly in the context of property purchases and mortgage transactions. In this article, we will discuss the key aspects of tripartite agreements in India, their legal implications, and the role of the parties involved.

What is a Tripartite Agreement?

A tripartite agreement is an arrangement between three parties, typically involving a lender, a borrower, and a third party, such as an escrow agent or a property buyer. The purpose of such an agreement is to establish the terms and conditions of a transaction and to ensure that all parties are aware of their respective rights and obligations.

In the context of the real estate industry, a tripartite agreement is often used when a property is being sold to a buyer who is financing the purchase with a mortgage. The agreement sets out the terms of the loan, including the interest rate, repayment schedule, and any fees or penalties that may apply. It also establishes the roles and responsibilities of the lender, borrower, and any third parties involved in the transaction.

Legal Implications of Tripartite Agreements in India

Tripartite agreements in India are usually governed by the Indian Contract Act, 1872, which stipulates that a contract must be formed by the mutual consent of all parties and that all parties must agree to the same terms and conditions. In addition, the Transfer of Property Act, 1882, governs the transfer of ownership of real estate and sets out the legal requirements for a valid transfer.

Under Indian law, a tripartite agreement is usually held to be legally binding and enforceable, provided that it meets all the necessary legal requirements. This means that all parties must have legal capacity to enter into the agreement, that the terms and conditions must be clear and unambiguous, and that all parties must have an intention to be bound by the agreement.

The Role of the Parties in a Tripartite Agreement

A tripartite agreement involves three parties, each of whom plays a specific role in the transaction. The lender provides the funds for the purchase or mortgage, the borrower is the party receiving the funds, and the third party acts as an intermediary or facilitator.

The lender`s role is to provide the funds required for the transaction, which may include a mortgage loan or other form of financing. The lender is usually a financial institution such as a bank or a non-banking financial company (NBFC), and its role is to ensure that the borrower is able to repay the loan and that the transaction is legally valid.

The borrower`s role is to receive the funds and to ensure that all the necessary legal requirements are met to complete the transaction. This may involve ensuring that any legal or regulatory requirements are met, such as obtaining the necessary permits or approvals, and complying with all relevant laws and regulations.

The third party`s role is to act as an intermediary or facilitator, helping to ensure that the transaction runs smoothly and that all parties are aware of their rights and obligations. This may involve holding funds in escrow, verifying the authenticity of documents, and ensuring that all parties are aware of any potential risks or liabilities associated with the transaction.


In summary, a tripartite agreement is a legal agreement between three parties that is commonly used in the real estate industry in India. The agreement sets out the terms and conditions of a transaction and ensures that all parties are aware of their rights and obligations. Tripartite agreements are legally binding and enforceable under Indian law, provided that they meet all necessary legal requirements. If you are involved in a real estate transaction that requires a tripartite agreement, it is important to consult a qualified legal professional to ensure that the agreement is legally valid and enforceable.