Anti-Bribery Representations and Warranties Clauses
(Third-Party Intermediaries)

Summary

These clauses contain anti-bribery representations and warranties made by business partners and third-party intermediaries regarding their compliance with applicable laws, including the U.S. Foreign Corrupt Practices Act of 1977 (FCPA) and UK Bribery Act 2010 (UKBA). These clauses include practical guidance, drafting notes, and optional clauses. These representations and warranties can be used in a variety of service or agency engagement agreements. Optional language is also provided regarding a company's right to terminate the engagement agreement and be indemnified by a consultant, contractor, representative, or an agent (each, a Third Party) that breaches any of the anti-bribery representations and warranties in the agreement. A company's use of Third Parties in international transactions increases the risk that regulators may find the company liable for violations of applicable anti-bribery laws because, under the FCPA, UKBA and other laws, companies can be liable for bribes that Third Parties make while the Third Parties are performing services for, in conjunction with, or on behalf of, the companies. Moreover, under the FCPA, UKBA, and many local bribery laws, companies can be found liable not only for any Third-Party bribes companies know about, but also any bribes the companies should have known about through the exercise of due diligence and use of internal controls designed to prevent or detect violations of the applicable bribery laws by the Third Parties. The anti-bribery internal controls that regulators expect companies to implement include formally engaging Third Parties with written agreements containing provisions that obligate Third Parties to become familiar and comply with the applicable anti-bribery laws. The recommended agreement provisions include representations and warranties by Third Parties regarding their current and past compliance with the applicable anti-bribery laws. Requiring Third Parties to make anti-bribery representations and warranties as part of their engagement agreements (1) memorializes that the Company has established expectations for ethical conduct by Third Parties during the engagement, and (2) forms a basis for companies to terminate the agreement and pursue a breach of contract or indemnification claim if a Third Party makes inaccurate representations and warranties in the executed agreement. Drafters should modify the language in the standard clauses, as necessary, to address the specific types and level of risks for each engagement. Text shown in brackets is either an optional provision or alternate language that drafters may select, edit, or delete at their discretion. For a full listing of related contract clauses, see General Commercial Contract Clause Resource Kit. For more information regarding the FCPA and UKBA, see Foreign Corrupt Practices Act (FCPA) and UK Bribery Act. See also Anti-Bribery Representations and Warranties Clause.