Further instruments and acts: Overview, definition, and example
What are further instruments and acts?
Further instruments and acts refer to the actions, documents, or agreements that a party may be required to execute or perform after a contract is signed to fully implement its terms or carry out its objectives. This provision ensures that both parties are obligated to take additional reasonable steps necessary to complete or clarify the transaction or agreement.
For example, after signing a merger agreement, the parties may need to execute additional filings, such as regulatory documents or assignments of rights, to finalize the transaction.
Why are further instruments and acts important?
The further instruments and acts clause is important because it ensures the full execution of a contract, even if additional steps are required after the initial agreement is signed. It provides a safeguard for unforeseen circumstances or administrative requirements that may arise later.
For SMBs, this clause ensures flexibility and cooperation between parties, reducing the risk of disputes or delays caused by incomplete documentation or unresolved actions.
Understanding further instruments and acts through an example
Imagine an SMB acquires another company, and the acquisition agreement requires the seller to transfer intellectual property rights. While the primary agreement outlines the transaction, a further instruments and acts clause obligates the seller to execute additional assignments or documents needed to fully transfer ownership of the intellectual property.
In another scenario, a construction contract includes a further instruments and acts clause requiring both the contractor and client to execute any additional permits or authorizations necessary to comply with local regulations, ensuring the project progresses without interruptions.
An example of a further instruments and acts clause
Here’s how a further instruments and acts clause might appear in a contract:
“The Parties agree to execute and deliver such further instruments and perform such acts as may reasonably be necessary to carry out the purposes and intent of this Agreement, including, but not limited to, the preparation, execution, and filing of any documents required to effectuate the transactions contemplated herein.”
Conclusion
The further instruments and acts clause ensures that both parties are committed to taking any additional steps needed to fulfill the terms of a contract. For SMBs, this clause provides flexibility, facilitates smoother execution of agreements, and minimizes risks of disputes or incomplete transactions. Including this provision ensures cooperation and clarity, allowing businesses to achieve their contractual objectives effectively.
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.