This form provides boilerplate contract clauses that give further assurances and pre-closing assurances to the various parties of the contract agreement. Several different language options are included to suit individual needs and circumstances.
Washington Negotiating and Drafting Further Assurances and Pre-Closing Assurances Provisions
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If one party learns that the other is facing financial trouble, for example, the further assurances clause allows them to request assurances from the party in question to prove that no financial problems actually exist. A further assurance clause may appear in a number of different places within a contract.
This clause provides a buyer with the assurance that their right to possess the property won't be negatively impacted by any legal claims made against the property by a third party.
Further assurance clauses are intended to create legal obligations requiring one or more of the parties to a contract to commit to do unspecified acts to reassure the other party will do what is reasonable or necessary to bring home the full benefit of the contract.
Without a further assurances clause one party might try to escape the contract by withholding assistance to the other party where that assistance is either necessary or of great importance.
A further assurances clause is used to evidence the agreement of the contracting parties to do everything necessary to complete the transactions contemplated by the contract.
By Practical Law Commercial. A boilerplate further assurance clause that seeks to ensure that the parties carry out any additional acts necessary to give effect to the contract, including the procuring of such acts by third parties.
A good example of this is with an automobile dealership selling a car that requires financing. The dealer's covenant of assurance to the finance company is the assurance the title is perfected by filling out the proper paperwork reflecting the finance company having a lien against the car as collateral for the loan.