Cocontracts

Cocontracts are a concept in contract law that refers to a situation where multiple parties enter into separate, but interconnected, contracts that are intended to operate together. These contracts are not a single, unified agreement but rather distinct legal instruments. The key characteristic of cocontracts is that the obligations and rights of each party in one contract are often dependent on the performance or non-performance of a party in another cocontract. This interdependence is usually explicitly stated within the agreements.

The purpose of using cocontracts is to manage complex transactions involving several parties who may not wish to be jointly and severally liable for the entire undertaking. For instance, a developer might enter into a cocontract with a contractor for construction and a separate cocontract with a financier for project funding. The contractor's obligation to build is tied to the financier's obligation to disburse funds, and vice versa. If one party defaults in their cocontract, it can trigger specific remedies or termination clauses in the other related cocontracts. This structure allows for a more tailored allocation of risk and responsibility among the participants.

Understanding the precise nature and enforceability of cocontracts requires careful examination of the wording of each individual agreement and the relationship between them. Courts will look to the intent of the parties as expressed in the contracts to determine how they should be interpreted and enforced, particularly when disputes arise.