Agreement to continue in force: Overview, definition, and example
What is an agreement to continue in force?
An agreement to continue in force is a provision in a contract that states that the contract will remain valid and enforceable even if certain conditions change or if specific events occur. Essentially, it is a guarantee that the terms of the agreement will remain in effect for a specified period, or until certain conditions are met, regardless of other circumstances. This provision ensures that both parties are committed to upholding the agreement, even if external factors or unforeseen events arise.
For example, a service agreement might include a clause stating that the agreement to provide services will continue in force even if there is a change in management or ownership of the company.
Why is an agreement to continue in force important?
An agreement to continue in force is important because it provides stability and assurance to the parties involved that the contract will remain legally binding and enforceable. This helps avoid the uncertainty that may arise when unexpected events or changes occur, such as mergers, acquisitions, or changes in the business environment. For businesses, it ensures that critical contracts (e.g., lease agreements, service contracts, or employment contracts) continue to be valid even through transitions or changes in circumstance.
For both parties in an agreement, knowing that the terms will continue to be effective without renegotiation or cancellation reduces risk and allows for long-term planning.
Understanding agreement to continue in force through an example
Imagine a company, GreenTech Solutions, enters into a contract with a supplier to purchase raw materials over the next five years. The contract includes an "agreement to continue in force" clause, which ensures that the contract remains valid even if there is a change in ownership or management at either company during the term of the contract. If GreenTech Solutions is acquired by a larger company, the contract will still remain in force, and the supplier must continue providing materials according to the agreed terms, ensuring stability for both parties.
In another example, a commercial lease agreement between a business and a landlord includes a provision that the lease will continue in force even if the landlord sells the property. This ensures that the business can continue operating under the same terms without the need for a new lease agreement or renegotiation.
An example of an "agreement to continue in force" clause
Here’s how a clause like this might appear in a contract:
“The Parties agree that this Agreement shall continue in force and remain binding even in the event of a change in ownership, management, or control of either Party, and that all obligations and rights outlined herein will be upheld without modification.”
Conclusion
An agreement to continue in force is a clause in a contract that ensures the agreement remains valid and enforceable regardless of changes in circumstances, such as changes in ownership, management, or external factors. This provision provides security and stability for businesses, ensuring that agreements remain intact and enforceable over time. For both parties, having an agreement to continue in force reduces uncertainty and ensures continuity in business relationships.
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.