Revocation and effect of consents: Overview, definition, and example
What is revocation and effect of consents?
Revocation and effect of consents is a clause that addresses two key things: (1) whether a party can withdraw or revoke a previously given consent, and (2) what legal effect that consent has once it’s given. It’s commonly found in financing agreements, shareholder consents, and amendment procedures—especially where timing, reliance, or majority thresholds are involved.
Why is revocation and effect of consents important?
This clause provides clarity around whether a consent is binding once delivered and whether it can be withdrawn before a decision becomes final. It’s particularly important in group decision-making—such as bondholder approvals, lender consents, or shareholder votes—where parties need to know whether a consent can be counted and relied upon. Without clear rules, parties may argue about whether consents were valid, revoked in time, or enforceable.
Understanding revocation and effect of consents through an example
A borrower seeks approval from its lenders to amend a credit agreement. The agreement requires consent from 66.7% of the lenders. One lender submits written consent but tries to revoke it a day later, before the amendment is finalized. The agreement includes a revocation and effect of consents clause stating that consents are binding when delivered and may not be revoked. As a result, the consent stands, and the amendment goes through with the required majority.
Example of a revocation and effect of consents clause
Here’s how a revocation and effect of consents clause may look like in a contract:
"Any consent or approval given by a party under this agreement shall be effective upon delivery and shall be irrevocable unless otherwise expressly stated herein. No party shall have the right to withdraw or modify its consent once delivered, except with the written agreement of all affected parties."
Conclusion
The revocation and effect of consents clause prevents confusion and disputes over changing minds after consents have been submitted. It gives all parties confidence in relying on decisions that require approval thresholds and ensures that once a consent is delivered, it has clear legal weight. If your contract involves group approvals or formal consents, this clause is key to procedural certainty.
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.