What Is a Survival Clause?
Some contracts contain a 'survival clause'. Find out what it is and the legal effects it may have on you in this article.
Contracts often contain a termination date, meaning that the contract is not valid after this date. However, you can draft a contract so that certain provisions remain in effect. These clauses are called ‘survival clauses’. In this article, we’ll talk about what a survival clause is and the legal ramifications of using one.
Survival clauses cause certain provisions of a contract to remain valid after the expiration or termination of a contract. These types of clauses are typically used in non-disclosure agreements and non-competition provisions, as well as indemnities and insurance provisions. Survival clauses are something to be cautious of as they may affect your rights and obligations even after the end of a contract.
Survival clauses are necessary if the disclosing party (eg. your employer) wishes to have something persist after the contract’s termination. These clauses are important to consider because they may cause certain rights or liabilities to continue even after the end of the contract. Therefore, it is necessary to read your contract correctly and be aware of any persisting rights and liabilities.
To illustrate a survival clause it is best to look at a non-disclosure agreement. This agreement includes the passing of confidential information that the disclosing party wants to protect even after the expiration of the contract. To protect the information of the disclosing party, you would have to not disclose the information for a certain length of time after the end of the contract.
Survival clauses should indicate what provisions will persist and the term of this extension. Here are some general examples of survival clauses so you can identify them in your non-disclosure or non-compete contracts:
- The parties’ obligations under Sections [NON-DISCLOSURE OBLIGATIONS], [NON-COMPETITION OBLIGATION], and [EFFECT OF TERMINATION] will survive the [TERMINATION, EXPIRATION, CLOSING DATE] of this Agreement
- The parties’ rights and obligations under this Agreement will survive the termination of this Agreement
- The provisions of Section X shall survive the termination of the term and any termination or expiration of this Agreement
Always pay attention to the provisions in your contract before claiming it is unfair because certain provisions may continue even after the contract ends.
A survival clause can help you clarify the terms of a contract. This means that even if the contract itself ceases to be effective, other parts of it may live on. If you’re unsure as to how to use one in your contracts, it is worth contacting a contract lawyer.
Jakub is a legal intern at Lawpath as part of the content team. He is currently studying a Bachelor of Laws at Macquarie University. His main interest is on the integration of legal and technological services.