Essentially, you are saying that regardless of what has been agreed to in the main survival clause, confidentiality obligations must continue indefinitely beyond the end of the contract. For example, as used in the example survival clause below, this probably means that Article 7 must survive six years, although the survival period in section 11.6 indicates a different period. With the survival clause, you can agree in principle that each contractual clause remains legally binding and enforceable even after the contract has expired. Because a non-disclosure agreement has a unique and sensitive nature, the terms of a survival clause are often required, not optional. If intellectual property and trade secrets are disclosed for any reason, such inside information should remain confidential even after the relationship between the parties concerned has ended. Examples of reasons why intellectual property may be disclosed include: In these cases, a general survival clause is often sufficient. In other situations, it may be extremely relevant for you to formulate survival conditions in such a way that they protect you for a very specific period of time or in a certain way. A simple survival clause could begin by saying: The following sections will survive the expiration or termination of this Agreement and remain in effect until they are performed. It would also include a list of items that apply to the survival clause, such as: The survival clause in a sales contract is quite common.
However, the retention of the provisions does not necessarily require a separate clause. Instead, the survival of a particular provision could be included in the clause itself. For example, if the parties intend for the confidentiality clause to last two years to the agreement, they could insert at the end of the confidentiality clause: “The confidentiality obligations apply for the duration of this agreement and for two years after the termination or expiration of the agreement.” This could be repeated for all other provisions that the parties intend to survive. Clauses that survive termination include obligations related to infringement litigation, substantive proceedings, or ancillary obligations. Other rights may also survive termination, including a right to damages and performance of a contract. If the survival clause says that the bonds survive 3 years, then that is clear. Choose the most suitable survival conditions for your situation and clarify the choice of words. There are three typical types of survival clauses: (1) continuity of provisions, (2) continuity of insurance and guarantees, and (3) continuity of claims.
Of the three, only the survival of the provisions is necessary or useful. With that in mind, my goal here is to clarify what a survival term is, what it looks like in NDAs, and how it should be used fairly in your agreements. What happens if the parties have agreed on a 3-year survival clause? Generally, any duties, liabilities or obligations that the parties have under any provision of an agreement terminate upon termination of the agreement. A survival clause overrides this provision and allows the provisions of an agreement to “survive” after the end of the agreement itself. In 2011, the Delaware Court of Chancery ruled that a survival clause is the statute of limitations for a buyer`s ability to bring an action for breach of contract. (GRT, Inc. v Marathon GTF Tech., Ltd., 2011 Del. Ch. LEXIS 99 (July 11, 2011). The survival clause should include two things: (1) which provisions will survive, and (2) the survival period, how long the provisions will survive after the end of the agreement.
The survival clause specifies which contractual provisions remain in force after the termination or expiry of the contract. The general rule is that the limitation of liability clause does not survive termination of the contract unless the parties expressly wish to do so. Therefore, survival conditions and clauses may be required in your NDA. It often happens that you discover a survival clause in your contract. Instead of using a survival clause, it is easier to specify how each clause or section will survive. This is the preferred method of describing the survival of the terms of a contract. For example, you can include in the non-competition clause a survival period that states that the terms of the contract begin on the effective date and that the clause remains in effect for a certain number of years after the agreement expires or is terminated.