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.
Specific Contractual Obligations
For the clause to create a binding obligation to perform, another legal obligation in the contract must exist for it to attach to.
That means that there must be a specific contractual obligation in a contract. The Further Assurance Clause is interpreted to relate to that specific contractual obligation to take its legal effect.
When Further Assurances won’t work
In other words, broadly expressed, conceptual legal obligations not connected to a specific legal right are unlikely to be enforceable.
Example: Production of Documentation
For instance, a further assurance clause probably will not have the legal effect upon a party to produce unspecified documentation, if there is no obligation to produce documentation in the contract in the first place.
In that example situation, a Further Assurance Clause imposing an obligation for the party required to produce the documentation to go further: to do all things reasonable and necessary to produce the documentation. it's an additional obligation to perform the contract.
In this way, the effect of the further assurance clauses rely upon the other provisions of the contract for their legal effect.
Shortfalls and Defects
Attempts to use a further assurance clause to catch shortfalls in what they would hope to gain from the contract which remain unspecified can be expected to fail.
Contracting parties would be better served to:
- think through what is required to obtain the full benefit of the contract
- provide specific obligations to that effect in the contract
- leave reliance on Further Assurance clauses as a distant last resort.
Example: Further Assurance clause
Each party shall, from time to time on being reasonably required to so by any other party, now or at any time in the future, do all such acts which are reasonable or necessary to give full effect to this Agreement.
Related: Boilerplate Clauses