Further assurance: Overview, definition, and example
What is further assurance?
Further assurance refers to a provision in a contract where one party agrees to take additional actions or steps in the future to ensure that the terms of the agreement are fully carried out and that any necessary legal documents or procedures are completed. This often involves providing additional documents, signatures, or other forms of assistance to help finalize or perfect the contract’s terms. It ensures that both parties can rely on the agreement being fully executed and legally enforceable.
For example, if a company is selling a piece of property, the seller may agree to provide further assurance to ensure that the property title is properly transferred or to correct any issues that arise during the transfer process.
Why is further assurance important?
Further assurance is important because it ensures that the contract can be fully completed and that the legal rights of both parties are protected. Even if the primary terms of the agreement are fulfilled, there may be outstanding actions or formalities that need to be addressed. The further assurance provision helps to ensure that all steps are taken, even after the agreement is signed, to finalize the contract or resolve any lingering issues.
For businesses, this provision helps maintain clarity and legal certainty, ensuring that any future actions required to enforce or complete the agreement are understood and agreed upon in advance.
Understanding further assurance through an example
Imagine a company that is selling a piece of intellectual property to another business. After the sale, the seller may need to provide further assurance by signing additional documents to transfer ownership rights and intellectual property registrations, ensuring that the buyer receives full and unencumbered ownership of the property.
In another example, a business acquiring a property may ask the seller to provide further assurance that any necessary permits or approvals are in place to ensure the property can be used as intended, even if the initial agreement did not fully address these items.
An example of a further assurance clause
Here’s how a further assurance clause might look in a contract:
“The Parties agree that, following the execution of this Agreement, each Party shall do all acts, execute all further documents, and take all other necessary actions to ensure the full and effective implementation of this Agreement and to provide the other Party with any further assurances required to give effect to the terms of this Agreement.”
Conclusion
Further assurance is a valuable provision in contracts, as it helps ensure that both parties complete all necessary steps to fulfill the terms of the agreement, even after it has been signed. It provides additional legal security by ensuring that no part of the contract is left incomplete or unenforceable due to missing actions or documentation.
Including a further assurance clause in contracts helps businesses address any outstanding formalities and ensures that the contract is fully executed, protecting all parties involved.
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.