PASSIVES Sample Clauses

The "Passives" clause defines how liabilities or obligations that are not immediately due—often referred to as contingent or future liabilities—are treated under the agreement. In practice, this clause may specify how such obligations are disclosed, accounted for, or transferred between parties, such as in the context of a business sale where the buyer and seller must agree on responsibility for outstanding debts or unresolved claims. Its core function is to ensure transparency and proper allocation of responsibility for these non-current liabilities, thereby preventing disputes over who bears the risk or cost of obligations that may arise after the agreement is executed.