Provision of information: Overview, definition, and example
What is provision of information?
Provision of information refers to a contractual obligation requiring one party to supply specific data, documents, or details to another party, either on a one-time or ongoing basis. This clause ensures that relevant and accurate information is shared to support the performance of the contract, compliance with regulations, or informed decision-making.
Why is provision of information important?
The provision of information is important because it ensures transparency, accountability, and collaboration between parties in a contract. For businesses, this clause is essential for enabling smooth operations, maintaining compliance with laws, and preventing misunderstandings or disputes arising from a lack of necessary information.
Clearly defining what information must be provided, when, and in what format helps set expectations and ensures that all parties fulfill their obligations effectively.
Understanding provision of information through an example
Imagine a software development agreement where the client is required to provide detailed project requirements and design preferences to the developer. The provision of information clause ensures the client supplies these details within a specified timeframe to avoid delays in the project.
In another example, a loan agreement includes a provision of information clause requiring the borrower to submit regular financial statements and updates about their business operations to the lender. This allows the lender to monitor the borrower’s financial health and compliance with the loan terms.
An example of a provision of information clause
Here’s how a provision of information clause might appear in a contract:
“Each Party agrees to provide all necessary information, documents, and data required for the performance of their obligations under this Agreement. Such information shall be accurate, complete, and provided within [Insert Timeframe] upon request. Failure to provide the required information may result in delays or additional costs, for which the responsible Party shall be liable.”
Conclusion
A provision of information clause facilitates transparency and accountability by requiring the sharing of necessary data and details between parties. For businesses, it ensures smooth operations, supports compliance, and reduces the risk of disputes caused by incomplete or delayed information. Including this clause in agreements establishes clear expectations and helps maintain effective communication and collaboration throughout the contract's duration.
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.