Additional agreements: Overview, definition, and example
What are additional agreements?
Additional agreements refer to supplementary contracts or arrangements made between parties that are separate from, but related to, a primary agreement. These agreements address specific terms, obligations, or conditions not covered in the main contract, often ensuring a more comprehensive understanding between the parties.
For example, in a business acquisition, additional agreements might include a non-compete agreement, intellectual property assignment, or transition services agreement to support the main transaction.
Why are additional agreements important?
Additional agreements are important because they provide flexibility to address specific needs or issues that may not fit within the scope of the primary contract. They help clarify obligations, ensure compliance with regulatory or operational requirements, and reduce the risk of misunderstandings.
For businesses, additional agreements enhance the enforceability of critical terms and allow parties to tailor provisions to address unique circumstances without overcomplicating the main agreement.
Understanding additional agreements through an example
Imagine a company purchasing a competitor. The primary purchase agreement outlines the terms of the sale, but the deal also includes an additional non-compete agreement, in which the seller agrees not to start a competing business for five years. This additional agreement ensures the buyer’s investment is protected.
In another example, a software licensing agreement is accompanied by a maintenance and support agreement. While the primary agreement licenses the software, the additional agreement specifies how updates, technical support, and troubleshooting services will be provided.
An example of an additional agreements clause
Here’s how an additional agreements clause might look in a contract:
“The Parties agree to execute additional agreements, including but not limited to a Non-Disclosure Agreement and a Transition Services Agreement, as necessary to effectuate the terms of this Agreement. Such additional agreements shall be incorporated by reference and deemed an integral part of this transaction.”
Conclusion
Additional agreements provide the flexibility to address specific issues or obligations that are separate from the primary agreement, ensuring a comprehensive understanding between parties. They help clarify roles, reduce risks, and adapt to unique circumstances without overburdening the main contract.
By including additional agreements and referencing them appropriately in the primary contract, businesses can achieve smoother transactions, better enforceability, and tailored solutions to meet their specific needs.
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.