Effectiveness clause: Copy, customize, and use instantly
Introduction
An effectiveness clause ensures that the contract becomes enforceable and operational only after certain conditions are met. It defines when the agreement takes effect, which can depend on external factors such as approvals, events, or actions by either party. This clause helps prevent obligations from taking effect prematurely, offering clarity on when performance is expected.
Below are templates for effectiveness clauses tailored to different scenarios. Copy, customize, and insert them into your agreement.
Effectiveness clause (conditional)
This variation is typically used when the contract’s effectiveness is contingent upon a specific condition, such as approval by a regulatory body or completion of due diligence.
This Agreement shall become effective only upon the approval of [specific entity or authority], or completion of [specific action or event], whichever occurs first.
Effectiveness clause (date-specific)
This variation is used when the contract’s effectiveness is determined by a fixed date, ensuring both parties know exactly when the obligations begin.
This Agreement will become effective on [specific date], unless terminated earlier in accordance with the terms of this Agreement.
Effectiveness clause (performance-based)
This variation is suitable when the contract becomes effective upon the performance of a specific act, such as the delivery of goods or services.
This Agreement will take effect upon the receipt of [specific deliverable or action], which must be completed by [date or condition].
Effectiveness clause (retroactive)
This variation is used when the contract is designed to be retroactively effective from a specific date, typically to cover prior arrangements or discussions.
This Agreement shall be deemed effective as of [specific date], with all rights and obligations to be applied as if the Agreement had been executed on that date.
Effectiveness clause (approval-based)
This variation is used when the contract becomes effective upon receiving approval from a specified authority or individual.
This Agreement shall become effective upon receiving written approval from [specific authority or person], and shall remain in full force once such approval is granted.
Effectiveness clause (third-party consent)
This variation ensures the contract is effective once a third-party consent or approval is obtained.
The effectiveness of this Agreement is conditional upon the receipt of consent from [third party], and the parties agree that this Agreement shall become effective on the date such consent is formally provided.
Effectiveness clause (documentation completion)
This variation makes the contract effective once specific documentation is completed or submitted.
This Agreement will become effective immediately upon the completion and submission of all necessary documentation, including but not limited to [list required documents], as specified by the parties.
Effectiveness clause (funding condition)
This variation ensures the contract becomes effective once funding or financial arrangements are secured.
This Agreement shall only become effective upon the successful disbursement of funds in the amount of [specific amount] to [party], and the parties agree to confirm the funding within [X] days.
Effectiveness clause (party action)
This variation requires one party to take a specific action to trigger the contract's effectiveness.
This Agreement shall become effective upon the execution of [specific action or document] by [party], which must occur no later than [date or condition].
Effectiveness clause (suspension condition)
This variation outlines a suspension condition before the contract becomes effective.
This Agreement shall be suspended and will not become effective until the fulfillment of [condition], after which the Agreement shall take effect without further delay.
Effectiveness clause (satisfaction of conditions)
This variation ensures the contract becomes effective once certain conditions are satisfied.
This Agreement shall become effective once all conditions precedent set forth in Section [X] are satisfied, including but not limited to [specific conditions].
Effectiveness clause (completion of prerequisites)
This variation is used when specific prerequisites must be met before the contract becomes effective.
This Agreement shall become effective upon the completion of the following prerequisites: (1) [first prerequisite], (2) [second prerequisite], and (3) [third prerequisite], as agreed by both parties.
Effectiveness clause (event occurrence)
This variation ensures the contract takes effect once a certain event takes place.
This Agreement will become effective upon the occurrence of [specific event or milestone], and all related obligations will commence once the event is verified.
Effectiveness clause (subject to laws)
This variation ensures that the contract becomes effective only when the applicable laws or regulations allow for it.
This Agreement shall become effective only upon the determination that all applicable laws and regulations permit its execution and enforcement. Until such determination is made, the Agreement shall be considered null and void.
Effectiveness clause (completion of inspections)
This variation makes the contract effective once certain inspections are completed to ensure compliance.
This Agreement shall become effective only upon the completion of [specific inspections] by [party], ensuring that all necessary standards and requirements are met.
Effectiveness clause (compliance with standards)
This variation ensures that the contract becomes effective once compliance with specified standards is confirmed.
This Agreement will be effective upon the confirmation that all necessary conditions set forth in the industry standards and specifications have been met by [party].
Effectiveness clause (approval by stakeholders)
This variation makes the contract contingent upon the approval of relevant stakeholders or shareholders.
This Agreement shall become effective upon receiving approval from [stakeholders/shareholders] of both parties, and the Agreement will remain valid once such approval is confirmed.
Effectiveness clause (market conditions)
This variation ensures the contract becomes effective once specific market conditions are met.
This Agreement shall only become effective once the market conditions specified in [Section X] are satisfied, including but not limited to [list market conditions].
Effectiveness clause (execution of additional agreements)
This variation requires the execution of additional agreements or documents before the contract takes effect.
This Agreement shall become effective only after the execution of all additional agreements and documents required by both parties, including but not limited to [specific agreements].
Effectiveness clause (triggered by external funding)
This variation triggers the contract’s effectiveness upon securing external funding or financial backing.
This Agreement shall become effective only once external funding in the amount of [specified amount] has been secured by [party], and confirmation of such funding has been provided in writing.
Effectiveness clause (non-compete validation)
This variation ensures that the contract takes effect once non-compete agreements or validation are completed.
This Agreement shall be effective only upon the execution and validation of the accompanying non-compete agreements by both parties, ensuring that all terms are aligned with the restrictions imposed by the non-compete.
Effectiveness clause (fulfillment of warranties)
This variation triggers the effectiveness of the contract once specific warranties are fulfilled.
This Agreement shall become effective once the parties have fulfilled all warranties and representations set forth in [Section X], including but not limited to [specific warranties].
Effectiveness clause (change of business structure)
This variation ensures the contract becomes effective once a business structure change occurs.
This Agreement shall become effective only upon the change of business structure, including but not limited to [business restructure details], which shall be executed no later than [date].
Effectiveness clause (settlement of disputes)
This variation makes the contract effective once existing disputes or claims between parties are settled.
This Agreement shall be effective upon the settlement of all ongoing disputes, claims, or lawsuits between [party 1] and [party 2], ensuring that no unresolved issues remain.
Effectiveness clause (compliance with insurance requirements)
This variation triggers the contract's effectiveness once the parties meet insurance requirements.
This Agreement will become effective upon proof of adequate insurance coverage by [party], including but not limited to [types of insurance], which must be provided no later than [date].
Effectiveness clause (preliminary approvals)
This variation requires preliminary approvals before the contract becomes effective.
This Agreement shall only become effective upon receiving the preliminary approvals from [regulatory body], confirming that all legal requirements are met.
Effectiveness clause (performance benchmarks)
This variation requires meeting specific performance benchmarks before the contract becomes effective.
This Agreement shall become effective once the performance benchmarks outlined in [Section X] are achieved by [party], and both parties agree to the fulfillment of these benchmarks.
Effectiveness clause (specified milestones)
This variation makes the contract effective upon achieving specific milestones or progress points.
This Agreement shall become effective once [party] has successfully completed the following milestones: [list milestones], with verification provided by [party].
Effectiveness clause (initial payment condition)
This variation ensures the contract becomes effective upon receipt of the initial payment or deposit.
This Agreement shall become effective upon receipt of the initial payment of [specified amount] by [party], which shall be made no later than [date].
Effectiveness clause (after specific event)
This variation makes the contract effective after a specific event occurs.
This Agreement shall become effective once the event of [specific event] occurs, and all terms and obligations shall apply from the date of that event.
Effectiveness clause (subject to approval)
This variation makes the contract effective only after it is approved by an internal or external body.
This Agreement shall become effective only after [approval body] grants its formal approval, which must occur within [X] days from the execution of this Agreement.
Effectiveness clause (post-signature condition)
This variation ensures the contract is effective once all parties have signed and initialed the agreement.
This Agreement shall become effective once all parties have signed and initialed this document, with the effective date being the last date of signature.
Effectiveness clause (disclosure completion)
This variation makes the contract effective once all required disclosures are made.
This Agreement shall become effective upon the completion of all necessary disclosures as required by [specific regulation], and both parties agree to provide such disclosures before [date].
Effectiveness clause (notification requirement)
This variation triggers the contract’s effectiveness once written notification is provided to the other party.
This Agreement shall become effective upon receipt of written notification from [party] confirming the fulfillment of all necessary requirements, including [list requirements].
Effectiveness clause (satisfaction of due diligence)
This variation ensures the contract becomes effective once due diligence has been completed.
This Agreement shall become effective only upon the satisfactory completion of due diligence by [party], including the review and approval of all relevant documentation and conditions.
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.