When you`re reading a legal document or contract, you may come across a phrase like “this agreement shall be binding upon and inure to the benefit of” and wonder what it means. This phrase is often included in contracts to clarify which parties are bound by the agreement and who will benefit from its terms.
Let`s break down the meaning of “binding upon” and “inure to the benefit” separately.
“Binding upon” means that all parties involved in the contract are bound or obligated to adhere to its terms. This means that each party has a legal obligation to fulfill their end of the agreement, and failure to do so can result in legal consequences. For example, if a company signs a contract with a supplier to purchase a certain amount of goods each month and fails to do so, the supplier can take legal action to enforce the terms of the contract.
“Inure to the benefit of” means that the agreement will provide advantages or benefits to certain parties. This clause ensures that even if a party is not directly involved in the contract, they may still receive some benefit from it. For example, if a company signs a contract with a supplier to purchase a certain amount of goods each month, the contract may also benefit their customers by ensuring a steady supply of products.
It`s important to note that both clauses typically apply to all parties involved in the contract. This means that all parties are bound by the terms of the agreement and will benefit from it in some way.
In summary, “this agreement shall be binding upon and inure to the benefit of” is a common phrase in legal contracts that clarifies the obligations and benefits of all parties involved. As a professional, it`s important to ensure that this phrase (or similar language) is included and properly explained in legal documents to help readers understand the intended meaning and implications of the agreement.