Binding effect clause: Copy, customize, and use instantly
Introduction
A binding effect clause makes sure the terms of a contract apply not just to the people or businesses signing it, but also to anyone who takes over their role, like successors or assigns. It spells out who is legally required to follow the contract, helping to avoid disagreements about who’s responsible.
Below are binding effect clause templates for different situations. Choose the one that fits, customise it, and include it in your contract.
Neutral binding effect clause
This clause ensures the contract binds the parties and their successors neutrally.
This agreement will bind and benefit the parties hereto and their respective heirs, executors, administrators, successors, and permitted assigns.
Successor-specific binding effect clause
This clause focuses on binding successors to the contract.
This agreement will be binding upon and inure to the benefit of the parties and their successors, provided such successors assume the obligations under this agreement in writing.
No third-party beneficiaries clause
This clause explicitly excludes rights for third parties.
This agreement is binding upon and inures to the benefit of the parties and their respective successors and assigns. No third party will have any rights or obligations under this agreement.
Conditional assignment binding clause
This clause restricts binding effect based on assignment conditions.
This agreement will bind and benefit the parties and their successors or assigns only if such assignment is made in compliance with the terms outlined in [specific section].
Corporate merger binding clause
This clause applies specifically to mergers or acquisitions.
In the event of a corporate merger, acquisition, or consolidation, this agreement will bind and benefit the resulting or surviving entity as a successor to the original party.
Partial binding effect clause
This clause applies the agreement only to specific sections for successors.
Only the obligations and rights outlined in [specific sections] of this agreement will bind the successors and assigns of the parties hereto.
Extended beneficiary binding clause
This clause explicitly includes beneficiaries in the binding effect.
This agreement will bind and benefit the parties, their successors, assigns, and any beneficiaries explicitly named herein.
Limited binding scope clause
This clause narrows the scope of binding effect to direct successors.
This agreement will be binding upon and inure only to the benefit of the parties and their direct successors. No indirect successors or assigns are granted any rights under this agreement.
Mutual consent binding clause
This clause ties binding effect to mutual consent between parties.
This agreement will bind the parties and their successors or assigns only upon mutual consent in writing, executed by both parties.
Binding for specified entities clause
This clause identifies specific entities as subject to binding effect.
This agreement will bind and benefit the parties hereto, as well as [specific entities, e.g., subsidiaries, affiliates], and their respective successors and assigns.
Perpetual binding clause
This clause ensures the agreement’s terms remain binding indefinitely.
This agreement will bind and benefit the parties and their successors, assigns, and heirs in perpetuity, regardless of any changes in ownership or control.
Assignment-exclusion binding clause
This clause prohibits binding assignments without prior approval.
This agreement will bind the parties and their successors, provided no assignment is made without the prior written consent of the other party.
Joint binding effect clause
This clause applies the agreement to parties acting jointly.
This agreement will bind and benefit the parties hereto and any successors or assigns who act jointly in fulfilling the obligations herein.
Cross-jurisdiction binding clause
This clause applies binding effect across jurisdictions.
This agreement will bind and benefit the parties, their successors, and assigns, regardless of the jurisdiction in which they operate or reside.
Binding with arbitration compliance clause
This clause ties binding effect to arbitration obligations.
This agreement will bind and benefit the parties and their successors, provided that any dispute arising under this agreement will be resolved through arbitration as outlined in [specific section].
Survival binding clause
This clause ensures the binding effect survives the termination of the agreement.
The binding obligations and benefits of this agreement will survive any termination or expiration, applying to the parties and their respective successors and assigns.
Mutual consent for successors clause
This clause binds successors only with written agreement.
This agreement will bind the parties and their successors or assigns only if both parties provide prior written consent to such succession or assignment.
Exclusion of affiliates clause
This clause explicitly excludes affiliates from the binding effect.
This agreement will bind the parties and their respective successors and assigns but will not apply to any affiliates unless explicitly agreed in writing.
Binding on heirs only clause
This clause limits binding effect to heirs, excluding other successors.
This agreement will bind and benefit the parties and their respective heirs but will not extend to other successors, assigns, or third parties.
Successor liability limitation clause
This clause limits the scope of liability for successors.
This agreement will bind the parties and their respective successors or assigns, but successors will not be liable for obligations beyond those explicitly stated in [specific section].
Conditional survival clause
This clause ties binding effect to specific conditions.
The binding obligations under this agreement will apply to successors and assigns only if the conditions outlined in [specific section] are fully satisfied.
Transfer of benefits only clause
This clause restricts the binding effect to benefits, excluding obligations.
This agreement will bind the parties and their successors or assigns only to the extent of transferring benefits, with no obligation to assume liabilities under this agreement.
Binding upon insolvency clause
This clause ensures the agreement applies even during insolvency.
This agreement will remain binding upon the parties and their successors, including trustees or representatives appointed during insolvency or bankruptcy proceedings.
Delegation without liability clause
This clause allows delegation without binding liability for successors.
This agreement will bind the parties, but successors or assigns delegated under this agreement will not be held liable for obligations unless explicitly agreed in writing.
Third-party beneficiary limitation clause
This clause narrowly defines binding third-party rights.
This agreement will bind the parties and their successors but will not create any rights or obligations for third-party beneficiaries unless expressly stated in this agreement.
Joint successor obligations clause
This clause ensures successors are jointly responsible.
Successors or assigns under this agreement will be jointly bound to fulfill all obligations, unless otherwise agreed in writing by the parties.
Successor approval clause
This clause requires prior approval before successors are bound.
This agreement will bind the parties and their successors, provided that any successor is approved in writing by the non-assigning party prior to the transfer of obligations or benefits.
Temporary binding effect clause
This clause limits binding effect to a set period.
This agreement will bind the parties and their successors or assigns for a period of [insert time period], after which any further binding effect must be renegotiated in writing.
Binding with carve-out clause
This clause excludes specific obligations from applying to successors.
This agreement will bind the parties and their successors, except for the obligations outlined in [specific section], which will remain solely with the original contracting parties.
Successor indemnity clause
This clause requires successors to indemnify the original party.
Successors or assigns under this agreement will assume all obligations and indemnify the original party against any liabilities arising from their actions under this agreement.
Successor notification clause
This clause requires successors to notify the other party.
Successors or assigns under this agreement must provide written notice to the other party within [insert time period] of assuming obligations under this agreement.
Binding effect with no retroactivity clause
This clause ensures successors are not liable for past breaches.
This agreement will bind the parties and their successors but will not impose liability on successors for breaches or obligations incurred prior to their assumption of this agreement.
Successor compliance clause
This clause requires successors to comply with additional terms.
Successors or assigns under this agreement must comply with all additional terms outlined in [specific section] before the binding effect is considered valid.
Partial binding effect clause
This clause limits binding effect to specific provisions of the agreement.
This agreement will bind the parties and their successors, but only the provisions outlined in [specific section] will apply to successors.
Future successor rights clause
This clause reserves binding rights for successors appointed in the future.
This agreement will bind the parties and any successors or assigns designated in the future, provided such designation complies with the terms of this agreement.
Binding effect with jurisdictional restriction clause
This clause limits binding effect to successors operating in specific jurisdictions.
This agreement will bind the parties and their successors, provided the successors operate within the jurisdictions specified in [specific section].
Binding for co-owned entities clause
This clause ensures entities jointly owned by successors are bound.
This agreement will bind the parties and any entities co-owned or managed by their successors, provided such entities are directly involved in fulfilling the obligations under this agreement.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.