Legal Definitions - adequate assurance

Definition: Adequate assurance refers to a circumstance or act that gives confidence to the party who is expecting something to happen. It is a pledge or guarantee that the contract will be fulfilled as agreed upon.

Examples:

• If a company orders goods from a supplier and the supplier fails to deliver on time, the company may demand adequate assurance that the goods will be delivered as promised. This could be in the form of a written guarantee or a deposit.
• In a real estatetransaction, the buyer may require adequate assurance that the seller has the legal right to sell the property and that there are no liens or encumbrances on the property.

These examples illustrate how adequate assurance is a way to ensure that both parties in a contract have confidence that the terms of the agreement will be fulfilled. It is a way to prevent misunderstandings and protect both parties from potential losses.