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.
New Jersey Negotiating and Drafting Further Assurances and Pre-Closing Assurances Provisions
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A covenant of further assurances is the related promise that the grantor will do whatever is necessary to remove a defect associated with title, such as an encumbrance, if it arises, and if the problem is not fixed, damages will be awarded. The express promise of doing whatever is necessary is a huge promise.
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.
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 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.
A standard boilerplate clause, in which the parties agree to cooperate with one another to take any actions not expressly specified in the agreement to carry out the intent of the agreement or implement its provisions.
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.
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.