Key Takeaways

  • A survival clause specifies which contract provisions remain enforceable after the agreement ends.
  • Common clauses that survive include confidentiality, indemnification, warranties, and non-compete obligations.
  • Survival clauses are vital in agreements involving intellectual property, sensitive data, or post-termination liabilities.
  • Courts generally enforce survival clauses if they’re clearly stated and reasonable in scope and duration.
  • Without a survival clause, many rights and obligations end with contract termination—even if unresolved issues remain.

A survival clause in contract outlines the provisions and terms that will remain in effect after the contract expires or is terminated.

Survival Clause: Overview

This clause is included in many types of contracts. Some of the most common obligations included in a survival clause include:

  • Effect of termination
  • Confidentiality
  • Non-compete

After meeting the core obligations, a survival clause can include more specific details relating to the individual agreement, including the continuance of certain obligations, warranties, and representations. Alternative forms of language allow for more adaptation to the complexity of survival clauses. When a contract includes alternative language, you can outline the representations, obligations, and warranties in a more general way. If needed, these sections can include enumerated lists that can outlast the contract if it is terminated or expires.

Rather than using a survival clause, an easier way is to include how each clause or section will survive. This is the preferred method for outlining the survival of terms in a contract. For example, in the non-compete clause, you could include a survival section that states the contract terms begin on the effective date and the clause will remain in effect for a certain number of years after the expiration or termination of the agreement.

Why Survival Clauses Are Essential in Contracts

Survival clauses play a key role in ensuring that critical obligations do not automatically end when a contract is terminated or expires. Without these clauses, parties may lose legal recourse for unresolved issues, such as breaches of confidentiality or failure to pay outstanding amounts. This is especially important in contracts involving:

  • The disclosure of trade secrets or confidential information
  • Intellectual property licensing or transfers
  • Indemnification for third-party claims
  • Representations and warranties that must remain enforceable post-transaction

In business transactions, survival clauses help allocate post-closing risk and protect against lingering liabilities that emerge after the formal relationship ends.

What's a Survival Term?

A non-disclosure or confidentiality agreement is important when one or both of the involved parties reveal privileged and confidential information when engaging in business together, such as negotiating a merger or making other types of arrangements. These agreements are often found in contracts for employment, existing to protect the trade secrets and intellectual property owned by a company. A survival term outlines the provisions or terms of the contract that remain in effect after the other terms have been met and the contract has been executed.

Since a non-disclosure agreement has a unique and sensitive nature, the terms in a survival clause are often required, not optional. If intellectual property and trade secrets are disclosed for any reason, that privileged information would need to remain confidential even after the relationship between the involved parties has ended. Examples of reasons why intellectual property might be disclosed include:

  • Employment
  • Product development
  • Acquisitions
  • Partnerships
  • Other business deals

Maintaining confidentiality is critical because certain information must stay private for a company to continue to survive. Therefore, the survival clauses and terms may be necessary to include in a non-disclosure agreement. A survival clause often outlines the warranties and representations of the seller that will survive the terms of the contract for a set amount of time.

Although the seller's warranties and representations help to create a foundation for the buyer to better understand the business or terms of the deal, the parties may not fully understand which of these warranties and representations will survive the terms of the agreement. Depending on the wording of the contract's survival clause, the interpretations and meanings can vary greatly. Contract laws that apply to that specific contract can also impact how the contract is perceived.

When you're drafting a contract that contains a survival clause, it's important to:

  • Have a clear understanding of the intent of the survival clause for both parties
  • Ensure that the wording of the clause is legally enforceable under the law and based on the intent of the parties

How Long Should a Survival Clause Last?

The duration of a survival clause should be reasonable and clearly stated. The length often depends on the nature of the obligation:

  • Confidentiality clauses: Often survive indefinitely or for a specified number of years.
  • Warranties and representations: Typically survive for 12 to 36 months.
  • Tax and indemnity clauses: May survive for the duration of the applicable statute of limitations, often 3 to 7 years.

Overly broad or perpetual survival clauses may be deemed unenforceable by courts if they’re viewed as unreasonable or against public policy. Therefore, specificity is critical—general language like “all provisions survive termination” is discouraged.

Example of a Survival Clause

A simple survival clause might start by stating: The following sections will survive the expiration or termination of this contract and remain in effect until fulfilled. It would also include a list of sections that apply to the survival clause, such as:

  • Taxes
  • Warranties
  • Limitation of liability
  • Payment
  • Order of precedence
  • Indemnification
  • Choice of forum and laws

When writing any type of survival provision in a contract, make sure to consider what would need to be done after the termination of the agreement. As is evident in the example of the simple survival provision, many of the terms relate to protection against third-party claims, as these remain in effect until after the statute of limitations, and for both parties to get what they expected and were promised.

In the section titled taxes, this protection would reduce the risk of liability if the buyer paid taxes, but the supplier or seller never paid those required taxes. In the payment section, the protection is for the seller or supplier, ensuring that the buyer's responsibility to pay as outlined in the terms will not expire.

Drafting Tips for Enforceable Survival Clauses

To create a legally sound and enforceable survival clause, consider the following tips:

  1. Be specific: List which provisions will survive termination (e.g., “Sections 4, 7, and 9 shall survive termination”).
  2. Define the duration: Indicate how long each surviving obligation will remain in effect.
  3. Avoid ambiguity: Vague survival language can lead to disputes over interpretation.
  4. Consider integration with other clauses: Instead of a catch-all survival clause, specify survival terms directly within each relevant provision (e.g., “This confidentiality obligation shall survive for 5 years following termination”).
  5. Review governing law: The enforceability of survival clauses can vary based on state contract laws and judicial interpretations.

Clear drafting ensures that both parties understand their continuing obligations and can reduce the risk of litigation post-contract.

Frequently Asked Questions

  1. What is the purpose of a survival clause in a contract?
    It ensures that specific provisions—such as confidentiality, indemnity, or payment obligations—remain enforceable after the contract ends.
  2. Do all contracts need a survival clause?
    Not all, but it’s highly recommended for agreements involving ongoing obligations or post-termination liabilities, such as NDAs, IP transfers, or warranties.
  3. Can a survival clause last forever?
    Some obligations, like confidentiality, may last indefinitely if specified, but most survival terms should be reasonable and time-bound to be enforceable.
  4. What happens if a contract doesn’t include a survival clause?
    Absent a survival clause, many rights and obligations typically expire with the contract, which can leave parties unprotected.
  5. Are survival clauses enforceable in court?
    Yes—courts generally uphold them if they are clearly written, reasonable in scope and duration, and consistent with applicable laws.

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