# Undertaking

> the business activities transferring/transferred to the Mutual from the Council under the Transfer Agreement.

**Term:** Undertaking  
**Last updated:** 2026-07-29

## Definition

## What Undertaking Means in a Contract

An Undertaking, in the context of a transfer or transaction agreement, refers to the identifiable business activity, function, or set of operations that is moving from one party to another. It is not merely a promise or obligation, which is how the word is sometimes used elsewhere in legal drafting, but rather a defined bundle of assets, staff, contracts, and goodwill that constitutes an operating business. When a public body or council transfers a service to a newly formed entity, such as a mutual organisation, the Undertaking is the collective term for everything that makes up that service.

This definition matters because it draws a boundary around what is being transferred and what is being retained. Everything falling within the scope of the Undertaking passes to the receiving party, while anything outside that definition stays with the original party. Contracts that use this term typically include a schedule or annex listing the assets, contracts, employees, and liabilities that fall within its scope.

## How Undertaking Is Defined or Measured

The Undertaking is usually defined by reference to a specific description of the business or service being transferred, often supplemented by schedules identifying tangible and intangible components. These might include property leases, equipment, intellectual property, customer contracts, employee records, and any regulatory licences necessary to operate the business.

Measurement of the Undertaking is less about numerical value and more about completeness and accuracy of description. Drafters typically use a mix of general wording, such as.

## Context

### Relevant circumstances

- When a business or trading activity is being moved from one entity to another
- If the scope of what is transferred needs to be clearly defined for TUPE or asset-allocation purposes
- Where assumed liabilities and excluded matters must be precisely captured

### Relevant sectors

- Legal Services
- Business Services
- Commercial Contracts

## Relevant contract types

- [Service Agreement](https://www.genieai.co/en-us/template-type/service-agreement)
- [Sale Agreement](https://www.genieai.co/en-us/template-type/sale-agreement)
- [Partnership Agreement](https://www.genieai.co/en-us/template-type/partnership-agreement)

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