Legal Definitions - further assurance

Further Assurance

Further assurance refers to a contractual provision, often found in deeds or agreements, that obligates one party to take additional steps or sign further documents in the future to ensure the full and effective transfer of rights or property, or to fully implement the intent of the original agreement. It acts as a safeguard, ensuring that the initial transaction is completely and legally solidified, even if unforeseen issues arise later.

Here are some examples:

• Real Estate Transaction: Imagine a situation where a homeowner sells their house. The deed is signed, and the sale is completed. However, a few months later, the buyer discovers an old, unreleased lien on the property from a previous owner that was overlooked during the initial title search. A "further assurance" clause in the original sale contract would obligate the seller to cooperate by signing any necessary documents to clear that old lien, ensuring the buyer has clear title to the property as originally intended.

• Business Acquisition: When a larger company acquires a smaller startup, the acquisition agreement will often include a further assurance clause. For instance, if the startup has several key software licenses or customer contracts that require third-party consent for transfer, the clause would compel the startup's former owners to assist the acquiring company in obtaining those consents or executing new agreements with the third parties after the main acquisition closes. This ensures all valuable assets and relationships are fully transferred to the new owner.

• Intellectual Property Licensing: A software developer licenses their unique code to a tech company. The licensing agreement includes a further assurance provision. If, after the initial agreement, the tech company discovers a minor technicality in the original patent application or copyright registration that could potentially weaken their rights to use the code, the developer would be legally bound to sign additional forms or provide further documentation to correct the issue and fully secure the tech company's licensed rights.