Subsequent actions: Overview, definition, and example
What are subsequent actions?
Subsequent actions refer to steps or obligations that must be completed after an agreement is signed or an event occurs. These actions ensure that all necessary follow-ups, such as regulatory filings, additional approvals, or further contractual obligations, are carried out properly.
For example, in a business acquisition, the contract may require the buyer to complete certain subsequent actions, such as obtaining government approvals or transferring intellectual property rights, even after the sale is finalized.
Why are subsequent actions important?
Subsequent actions help ensure that contracts, transactions, or regulatory requirements are fully completed beyond the initial agreement. Without clear obligations for follow-up actions, parties may face delays, legal disputes, or incomplete transactions.
For businesses, including a subsequent actions clause in contracts provides clarity on post-signing responsibilities, ensuring that all necessary steps are taken to finalize a deal or maintain compliance with legal and operational requirements.
Understanding subsequent actions through an example
Imagine a company signs a merger agreement. The contract specifies that after signing, both parties must complete subsequent actions, including notifying regulators, transferring assets, and updating corporate filings. If these actions are not completed, the merger might face delays or legal challenges.
In another case, a service provider signs a contract with a client but is required to provide subsequent actions such as submitting compliance reports or finalizing staff training. These actions ensure the service meets agreed-upon standards even after the contract starts.
An example of a subsequent actions clause
Here’s how a subsequent actions clause might appear in a contract:
“Each Party agrees to take all necessary subsequent actions, including executing additional documents and completing required filings, to ensure the full implementation of this Agreement.”
Conclusion
Subsequent actions ensure that agreements and obligations continue to be fulfilled even after an initial contract is signed. By clearly defining post-signing responsibilities, businesses can prevent delays, ensure compliance, and complete transactions smoothly.
Including a subsequent actions clause in contracts helps parties stay accountable and ensures that all required follow-ups are completed efficiently.
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.