The further assurances clause has moved from a routine closing‑transaction device to a litigated provision that can invoke the implied covenant of good faith and fair dealing.
Typical purpose and broader reach
In most asset‑sale agreements the provision asks a party, after the closing, to sign any additional documents needed to perfect the transfer. The language is usually short and tied to “evidence” of the transaction.
Contract scholars note that the clause also serves as a “catchall” that obliges a party to take incidental steps needed for the core commitment. It does not create a new duty, but it can require actions that align with the contract’s explicit terms.
One commentator described it as the exclamation point on an agreement, filling gaps the parties could not anticipate. That description mirrors the gap‑filling function of the implied covenant, which courts sometimes treat as a safety net for unforeseen circumstances.
The Delaware case that put the clause to the test
In Facilities Holdings, LLC v. ASM Global Parent, LLC, the operator of several sports and entertainment venues (the “Operator”) had a master concession agreement with an exclusive food‑and‑beverage vendor (the “Vendor”). The concession contracts said that if the Operator were sold, the term would extend five years, pending landlord approval.
When the Operator was bought by a competitor of the Vendor, the Vendor asked for the five‑year extension. It claimed each landlord refused consent. The plaintiff alleged the seller had secretly persuaded the landlords to withhold approval so the new owner could replace the vendor.
The Vendor’s complaint quoted the allegation: “that behind closed doors, the Operator convinced the landlords to withhold consent so the Operator could replace the Vendor with affiliates of the new owner.”
Beyond the implied‑covenant claim, the Vendor sued under the express “Further Action Provision.” The clause read:
Subject to the terms and conditions provided in this Agreement, following the date hereof each of the parties shall, as and when requested by another party hereto, execute and deliver, or cause to be executed and delivered, such further certificates, instruments and other documents, and to take, or cause to be taken, such further actions, as may be necessary, proper or advisable under applicable law to evidence and effectuate the transactions contemplated by this Agreement.
The Vendor argued that the provision imposed an affirmative duty to help obtain landlord consent, not merely a duty to stay neutral.
The Delaware Court of Chancery denied the Operator’s motion to dismiss both the implied‑covenant claim and the further‑action claim. The court said the language “required that the Operator provided some level of support for the Vendor in obtaining landlord consent for its extension request.”
In its opinion the court quoted:
“Here, an obligation to ‘take, or cause to be taken, such further actions, as may be necessary, proper or advisable under applicable law to . . . effectuate the transactions contemplated by this Agreement’ required that the Operator provided some level of support for the Vendor in obtaining landlord consent for its extension request. The Further Action Provision did not permit the Operator to seek to convince or induce a landlord to withhold its consent.”
The decision cited the implied covenant’s “neutrality and non‑harm” standard and found the alleged conduct could breach both obligations.
Case details: Facilities Holdings, No. CV 2025‑0670‑JTL, 2026 WL 1815842 (Del. Ch. June 24 2026).
Implications for drafting and practice
The Delaware ruling signals that courts may read such boilerplate as an affirmative duty, especially when the language mirrors the language of the implied covenant.
Legal commentary notes that the covenant functions as a limited “gap‑filler,” enforcing reasonable expectations in unforeseen situations without rewriting express terms.
Practitioners should therefore scrutinize the clause’s scope during negotiations. A narrowly worded provision that limits obligations to “executing documents” may avoid the risk of imposing affirmative conduct. Conversely, broader language can expose a party to liability if it fails to assist the other side in achieving the contract’s purpose.
Parties may start inserting explicit carve‑outs that specify whether affirmative efforts are required, or they may tie the duty to a measurable standard such as “commercially reasonable efforts.” This could reduce ambiguity and limit exposure to good‑faith claims.
In short, the case shows boilerplate is not immune.
Transactional lawyers must read beyond the label and assess whether the clause could be construed as an enforceable promise to act, rather than a mere formality.
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