Failure to comply clause: Copy, customize and use instantly
Introduction
A failure to comply clause outlines the consequences if one party does not fulfill their obligations under the agreement. It ensures accountability by detailing the remedies or actions available when a breach occurs. This clause is critical for managing expectations and minimizing risks in the event of non-compliance.
Below are failure to comply clause templates tailored for various situations. Copy the one you need, customize it, and add it to your contract.
Standard failure to comply clause
This balanced clause provides general remedies for non-compliance.
If either party fails to comply with any material obligation under this agreement, the non-defaulting party may provide written notice of such failure. If the defaulting party does not cure the failure within [insert number] days of receiving the notice, the non-defaulting party may pursue available remedies, including termination of this agreement.
Specific performance failure to comply clause
This clause emphasizes specific remedies like requiring the breaching party to perform their obligations.
In the event of a failure by either party to comply with the terms of this agreement, the non-breaching party may seek specific performance or other equitable relief to ensure compliance, in addition to any other remedies available under applicable law.
Financial penalty failure to comply clause
This clause imposes financial penalties for non-compliance.
If either party fails to comply with its obligations under this agreement, the defaulting party agrees to pay a penalty of [insert amount or formula] as liquidated damages. This payment does not preclude the non-defaulting party from pursuing other available remedies.
Termination-focused failure to comply clause
This clause prioritizes the right to terminate the agreement for non-compliance.
Failure to comply with any material term of this agreement will constitute a breach. If such breach is not cured within [insert number] days after written notice, the non-breaching party may terminate this agreement immediately and seek damages or other legal remedies.
Compliance plan failure to comply clause
This clause includes a requirement to submit a corrective plan for addressing non-compliance.
In the event of a failure to comply with the obligations under this agreement, the defaulting party must, within [insert number] days of receiving notice, submit a written plan detailing corrective actions. Failure to implement the plan within [insert number] days will entitle the non-defaulting party to pursue remedies, including termination.
Non-waiver failure to comply clause
This clause ensures that non-compliance cannot be overlooked or excused.
A failure to comply with any term of this agreement will not be deemed waived by the non-breaching party unless explicitly stated in writing. Any waiver of non-compliance will not constitute a waiver of future breaches.
Reimbursement failure to comply clause
This clause emphasizes cost recovery for non-compliance.
If either party fails to comply with this agreement, the defaulting party will reimburse the non-breaching party for all reasonable costs, expenses, and damages incurred as a result of the non-compliance, in addition to other remedies provided under this agreement.
Progressive enforcement failure to comply clause
This clause outlines a stepped approach to addressing non-compliance.
In the event of a failure to comply with the terms of this agreement, the non-breaching party may take progressive enforcement actions, including (i) written warnings, (ii) suspension of obligations, and (iii) termination of this agreement if the default is not remedied within [insert number] days.
Indemnification failure to comply clause
This clause emphasizes indemnification for damages caused by non-compliance.
If either party fails to comply with its obligations under this agreement, the defaulting party agrees to indemnify and hold harmless the non-breaching party from any claims, damages, or losses resulting from such non-compliance, in addition to any other available remedies.
Time-sensitive failure to comply clause
This clause sets strict timelines for addressing non-compliance.
Failure to comply with any obligation under this agreement must be remedied within [insert number] days of receiving notice from the non-breaching party. If not remedied within this time, the non-breaching party may immediately pursue legal remedies, including termination or damages.
Notification-based failure to comply clause
This clause requires detailed notice before pursuing remedies for non-compliance.
If either party fails to comply with its obligations under this agreement, the non-defaulting party must provide detailed written notice of the non-compliance, specifying the breach and any steps required to remedy it. The defaulting party will have [insert number] days from receipt of the notice to cure the breach, failing which the non-defaulting party may pursue remedies, including but not limited to termination and damages.
Conditional suspension failure to comply clause
This clause allows temporary suspension of obligations until compliance is restored.
In the event of a failure to comply with the terms of this agreement, the non-defaulting party may suspend its performance under the agreement until the defaulting party remedies the breach. If the breach is not remedied within [insert number] days of written notice, the non-defaulting party may terminate this agreement or pursue other remedies.
Third-party resolution failure to comply clause
This clause introduces mediation or arbitration for unresolved non-compliance.
If either party fails to comply with the terms of this agreement and the breach is not resolved within [insert number] days after written notice, the matter will be referred to mediation or arbitration in accordance with [insert mediation/arbitration rules]. Remedies granted through this process will be binding on both parties.
Escalation process failure to comply clause
This clause requires escalating the issue within the organization before taking legal action.
In the event of non-compliance with the terms of this agreement, the parties agree to escalate the issue internally, including discussions between senior representatives of both parties. If resolution is not achieved within [insert number] days, the non-defaulting party may pursue termination or other remedies as provided by law.
Force majeure exclusion failure to comply clause
This clause excludes non-compliance caused by force majeure events.
Failure to comply with the terms of this agreement will not constitute a breach if caused by events beyond the control of the defaulting party, including but not limited to acts of God, government actions, or other force majeure events. The defaulting party must notify the non-defaulting party immediately and take reasonable steps to mitigate the impact of such events.
Multi-tiered failure to comply clause
This clause specifies remedies based on the severity of non-compliance.
Non-compliance with minor obligations will result in written notice and an opportunity to cure within [insert number] days. For material breaches, the non-breaching party may pursue termination, damages, or equitable relief without further notice.
Confidentiality breach failure to comply clause
This clause emphasizes specific remedies for breaches of confidentiality.
If the defaulting party fails to comply with the confidentiality obligations under this agreement, the non-breaching party may seek immediate injunctive relief, damages, and termination of this agreement, in addition to any other remedies available under applicable law.
Technical non-compliance failure to comply clause
This clause addresses breaches involving technical or operational requirements.
In the event of a failure to comply with technical or operational obligations under this agreement, the defaulting party will have [insert number] days to implement corrective measures. If such measures are not completed within the specified period, the non-defaulting party may terminate the agreement or seek reimbursement for losses incurred.
Non-payment failure to comply clause
This clause addresses non-compliance related to payment obligations.
If either party fails to comply with its payment obligations under this agreement, the non-defaulting party may (i) suspend performance under this agreement, (ii) charge interest on overdue amounts at the rate of [insert percentage], and (iii) terminate this agreement if the failure is not remedied within [insert number] days of notice.
Partial compliance failure to comply clause
This clause provides remedies for incomplete or partial compliance.
Failure to fully comply with the obligations under this agreement will constitute a breach. The non-breaching party may (i) demand full compliance within [insert number] days, (ii) seek damages for incomplete performance, or (iii) terminate the agreement for material non-compliance.
Progressive penalty failure to comply clause
This clause imposes escalating penalties for ongoing non-compliance.
If a party fails to comply with its obligations under this agreement, escalating penalties will apply as follows: (i) a written warning for the first instance, (ii) financial penalties of [insert amount] for subsequent breaches, and (iii) termination of the agreement after [insert number] violations. Written notice will be provided before penalties are enforced.
Cure period flexibility failure to comply clause
This clause allows for adjustments to the cure period based on the nature of the breach.
In the event of a failure to comply with the terms of this agreement, the non-defaulting party will provide written notice specifying a cure period that reflects the severity of the breach, which will not exceed [insert maximum number] days. If the breach is not cured within the specified period, the non-defaulting party may terminate the agreement or seek remedies.
Temporary assistance failure to comply clause
This clause allows for support to the defaulting party to resolve the issue.
If a party fails to comply with its obligations under this agreement, the non-defaulting party may, at its discretion, provide temporary assistance to address the breach. Any costs incurred for such assistance will be reimbursed by the defaulting party. If the issue remains unresolved after [insert number] days, the non-defaulting party may pursue termination or other remedies.
Notification waiver failure to comply clause
This clause waives formal notice for specific minor breaches.
For minor breaches of this agreement, formal written notice may be waived at the discretion of the non-defaulting party, provided the breach does not materially affect the performance or outcomes under this agreement. For material breaches, written notice and a [insert number]-day cure period will be required.
Mutual investigation failure to comply clause
This clause requires a joint investigation before remedies are pursued.
In the event of non-compliance, both parties agree to conduct a joint investigation to identify the root cause and determine appropriate corrective measures. If no resolution is reached within [insert number] days, the non-defaulting party may pursue remedies, including termination or damages.
Strategic default failure to comply clause
This clause provides remedies for deliberate non-compliance.
If a party intentionally fails to comply with the terms of this agreement, the non-defaulting party may immediately terminate the agreement and seek damages for losses incurred as a result of the default. Intentional non-compliance will be presumed if no reasonable explanation or corrective action is provided within [insert number] days of notice.
Collaboration-based failure to comply clause
This clause emphasizes mutual cooperation to resolve breaches.
In the event of a failure to comply, the parties agree to collaborate in good faith to address the breach and implement corrective measures. If resolution cannot be achieved within [insert number] days, the non-defaulting party may terminate the agreement or seek damages for losses incurred.
Compliance monitoring failure to comply clause
This clause requires ongoing monitoring of compliance obligations.
Both parties agree to regular monitoring of compliance obligations under this agreement. In the event of non-compliance, the defaulting party must address the issue within [insert number] days of receiving written notice. Repeated breaches may result in termination or additional penalties as agreed.
Industry-specific failure to comply clause
This clause tailors remedies based on industry standards.
Failure to comply with the terms of this agreement will be addressed in accordance with the standard practices of [insert industry]. Remedies may include suspension of services, financial penalties, or termination, depending on the severity of the breach and industry norms.
Reputation damage failure to comply clause
This clause includes remedies for breaches causing reputational harm.
If non-compliance under this agreement results in damage to the reputation of the non-defaulting party, the defaulting party will be liable for any resulting losses, including costs associated with mitigating reputational harm. The non-defaulting party may also terminate this agreement if the breach is not cured within [insert number] days.
Conditional reinstatement failure to comply clause
This clause allows the defaulting party to resume performance under specific conditions.
If a party fails to comply with its obligations under this agreement, the non-defaulting party may suspend performance until the breach is cured. The defaulting party may resume performance only upon meeting all outstanding obligations and demonstrating compliance with the agreement’s terms within [insert number] days of notice.
Impact-based failure to comply clause
This clause tailors remedies based on the impact of the breach.
In the event of a failure to comply, the remedies imposed will be proportional to the impact of the breach on the non-defaulting party. Material breaches may result in termination or financial damages, while minor breaches will require a written corrective plan to be implemented within [insert number] days.
Discretionary extension failure to comply clause
This clause gives the non-defaulting party discretion to extend the cure period.
Upon a failure to comply, the non-defaulting party may, at its sole discretion, extend the cure period by an additional [insert number] days if it determines that the defaulting party is making reasonable efforts to address the breach. If the breach remains unresolved after the extension, the agreement may be terminated.
Third-party resolution failure to comply clause
This clause mandates third-party involvement for dispute resolution.
In the event of non-compliance, the parties agree to appoint a neutral third party to mediate and propose corrective measures. If the defaulting party fails to implement the proposed measures within [insert number] days, the non-defaulting party may terminate the agreement or seek other remedies.
Preventive measures failure to comply clause
This clause emphasizes preventing future breaches.
If a party fails to comply with this agreement, the non-defaulting party may require the defaulting party to implement preventive measures, including additional training, process changes, or audits. Failure to adopt these measures within [insert number] days may result in termination or additional penalties.
One-time breach failure to comply clause
This clause applies strict remedies for single instances of non-compliance.
Any single instance of non-compliance under this agreement may result in immediate termination or penalties, at the discretion of the non-defaulting party. No cure period is required for breaches deemed material or intentional by the non-defaulting party.
Multi-step escalation failure to comply clause
This clause incorporates escalating responses to non-compliance.
In the event of non-compliance, the following steps will apply: (i) written notice of the breach, (ii) a [insert number]-day cure period, (iii) mediation between the parties if unresolved, and (iv) termination of the agreement or pursuit of legal remedies if no resolution is achieved within [insert number] days of mediation.
Confidentiality-linked failure to comply clause
This clause applies to breaches involving confidential information.
If non-compliance involves the unauthorized disclosure of confidential information, the defaulting party will be required to take immediate corrective action, including retrieval and destruction of the disclosed materials. Failure to address the breach within [insert number] days may result in termination and liability for damages.
Force majeure-linked failure to comply clause
This clause distinguishes breaches caused by uncontrollable events.
Non-compliance due to events outside the defaulting party’s reasonable control will not result in penalties, provided that the defaulting party notifies the non-defaulting party within [insert number] days of the occurrence and takes reasonable steps to resume compliance as soon as possible.
Relationship-preserving failure to comply clause
This clause prioritizes maintaining the business relationship despite breaches.
In the event of non-compliance, the parties agree to prioritize maintaining their business relationship by negotiating alternative remedies or adjustments to the agreement. Termination will be pursued only as a last resort after all reasonable efforts to resolve the issue have failed.
Gradual remedy failure to comply clause
This clause introduces incremental penalties for unresolved breaches.
If a party fails to comply with its obligations under this agreement, the non-defaulting party may impose escalating remedies, including suspension of specific obligations, partial penalties, or restrictions on access to services. If the breach remains unresolved after [insert number] days, the non-defaulting party may terminate the agreement.
Acknowledgment of non-compliance clause
This clause requires the defaulting party to admit the breach as part of the resolution process.
In the event of non-compliance, the defaulting party must acknowledge its failure in writing and submit a plan to remedy the breach within [insert number] days. Failure to provide this acknowledgment or an adequate plan may result in termination or legal remedies.
Ongoing assessment failure to comply clause
This clause allows for regular monitoring after a breach.
If a party fails to comply, the non-defaulting party may require ongoing assessments or audits of the defaulting party’s performance for a period of [insert number] months following the resolution of the breach to ensure continued compliance.
Reimbursement-linked failure to comply clause
This clause requires compensation for losses caused by the breach.
In the event of non-compliance, the defaulting party must reimburse the non-defaulting party for any losses or expenses incurred as a direct result of the breach, including legal fees, operational costs, or reputational damage, within [insert number] days of notice.
Pre-determined penalties failure to comply clause
This clause specifies fixed penalties for non-compliance.
Any failure to comply with this agreement will result in a pre-determined penalty of [insert amount] for each instance of non-compliance. Penalties are due within [insert number] days of written notice from the non-defaulting party.
Collaboration-focused failure to comply clause
This clause emphasizes joint efforts to address breaches.
If non-compliance occurs, the parties agree to collaborate in good faith to identify the root cause of the breach and implement corrective measures. Termination will be pursued only if both parties agree that resolution is not achievable within [insert number] days.
Notification window failure to comply clause
This clause imposes strict timelines for notifying the non-defaulting party of breaches.
The defaulting party must notify the non-defaulting party of any non-compliance within [insert number] hours of becoming aware of the breach. Failure to provide timely notification may result in immediate termination or penalties.
Sector-specific failure to comply clause
This clause tailors remedies to industry norms.
In the event of non-compliance, the parties agree to follow standard remedies applicable to [insert industry], including corrective measures, third-party arbitration, or temporary suspension of obligations. If unresolved after [insert number] days, the agreement may be terminated.
Breach impact failure to comply clause
This clause bases remedies on the severity of the breach’s consequences.
Remedies for non-compliance will be determined based on the material impact of the breach on the non-defaulting party’s operations. Minor breaches will require corrective actions within [insert number] days, while significant breaches may result in immediate termination or damages.
Confidential compliance failure to comply clause
This clause applies strict remedies for breaches involving confidentiality agreements.
Any non-compliance related to confidentiality obligations will result in immediate review and remediation actions, including retrieval or deletion of sensitive information. If unresolved within [insert number] days, the non-defaulting party may terminate the agreement or seek legal remedies.
Time-sensitive failure to comply clause
This clause emphasizes rapid resolution for breaches involving time-critical obligations.
Any failure to comply with time-sensitive obligations under this agreement must be remedied within [insert number] hours. If the breach is not addressed within this timeframe, the non-defaulting party may terminate the agreement or seek other remedies.
Proactive resolution failure to comply clause
This clause encourages early resolution of potential breaches.
The defaulting party must take proactive steps to address any potential or actual non-compliance before it impacts the agreement. Failure to demonstrate reasonable efforts within [insert number] days of notice may result in termination or other penalties.
Non-performance suspension clause
This clause allows for suspension of specific provisions during a breach.
If a party fails to comply with any material obligation under this agreement, the non-defaulting party may suspend its performance of corresponding obligations until the breach is remedied. Continued non-compliance beyond [insert number] days may result in termination or additional remedies.
Compliance oversight clause
This clause enables oversight by a third party to ensure resolution.
In the event of non-compliance, the non-defaulting party may appoint an independent auditor or third-party monitor at the defaulting party’s expense to oversee and verify corrective actions. If compliance is not restored within [insert number] days, further action may be taken, including termination.
Step-in rights failure to comply clause
This clause allows the non-defaulting party to take over certain obligations.
If a party fails to comply with its obligations, the non-defaulting party may step in to fulfill the defaulting party’s obligations at the defaulting party’s expense. These step-in rights will continue until the breach is resolved or the agreement is terminated.
Escalated penalties failure to comply clause
This clause increases penalties based on duration of non-compliance.
For each [insert time period] of non-compliance, the defaulting party will incur an escalating penalty starting at [insert amount] and increasing by [insert percentage] every [insert time period]. Continued breaches may result in termination or legal remedies.
Cumulative breach failure to comply clause
This clause penalizes repeated breaches over time.
If a party accumulates [insert number] or more instances of non-compliance within a [insert time period] period, the non-defaulting party may terminate the agreement or impose additional remedies, regardless of whether individual breaches have been resolved.
Subcontractor compliance failure clause
This clause enforces compliance when subcontractors are involved.
The defaulting party is responsible for ensuring compliance by any subcontractors under this agreement. Non-compliance by subcontractors will be treated as a breach by the defaulting party, requiring resolution within [insert number] days or termination may result.
Financial reporting failure to comply clause
This clause applies when breaches involve financial reporting obligations.
Failure to comply with financial reporting obligations, including providing accurate and timely financial information, will result in penalties and require corrective actions within [insert number] days. Continued breaches may lead to suspension or termination of the agreement.
Proportional remedies failure to comply clause
This clause tailors remedies to the significance of the breach.
Remedies for non-compliance will be proportional to the severity and impact of the breach. Minor breaches will require corrective actions within [insert number] days, while material breaches may result in immediate penalties, suspension, or termination.
Default-induced renegotiation clause
This clause requires renegotiation upon certain breaches.
If a material breach occurs, the parties must enter into good faith negotiations to amend or restructure the agreement. If no resolution is reached within [insert number] days, the non-defaulting party may terminate the agreement or seek other remedies.
Term-specific failure to comply clause
This clause applies penalties specific to the phase of the agreement.
Non-compliance occurring during critical phases of the agreement, such as implementation or delivery periods, will result in immediate remedies tailored to those phases, including suspension of unrelated provisions or expedited termination processes.
Data security failure to comply clause
This clause focuses on breaches involving data security.
Any failure to comply with data security obligations under this agreement will require immediate notification and corrective actions. If the breach is not resolved within [insert number] days, the non-defaulting party may terminate the agreement or seek damages for losses incurred.
Performance assurance failure to comply clause
This clause provides remedies to ensure future compliance.
In the event of non-compliance, the defaulting party must provide performance assurances, including posting a bond or pre-paying for services, as a condition of continuing the agreement. Failure to comply with these assurances may result in termination.
Independent investigation failure to comply clause
This clause mandates an independent review for significant breaches.
For material breaches, the non-defaulting party may require an independent investigation to assess the cause and impact of the non-compliance. The findings will determine the appropriate remedies, which may include termination or damages. The costs of the investigation will be borne by the defaulting party.
Operational impact failure to comply clause
This clause links remedies to operational disruptions caused by the breach.
Remedies for non-compliance will be designed to mitigate operational disruptions caused by the breach. This may include compensatory penalties, mandatory corrective actions, or temporary reassignment of responsibilities to the non-defaulting party.
Joint resolution failure to comply clause
This clause emphasizes cooperative resolution efforts.
If non-compliance occurs, the parties agree to jointly develop a resolution plan within [insert number] days. If the plan is not agreed upon or implemented, the non-defaulting party may terminate the agreement or impose other remedies.
Multi-tiered resolution failure to comply clause
This clause outlines progressive steps for addressing non-compliance.
In the event of non-compliance, the defaulting party will first receive written notice and an opportunity to cure the breach within [insert number] days. If unresolved, the parties must engage in mediation or other agreed resolution methods. Failure to resolve at this stage may result in termination or enforcement of penalties.
Collaborative failure to comply clause
This clause prioritizes collaboration to resolve non-compliance.
Upon identifying non-compliance, both parties agree to collaborate on a corrective action plan within [insert number] days. If the defaulting party fails to cooperate or resolve the issue, the non-defaulting party may terminate the agreement or seek damages.
Cost-sharing failure to comply clause
This clause allocates costs associated with addressing breaches.
If a breach occurs, the defaulting party will bear all costs associated with corrective actions, including legal fees, operational losses, and other damages. Persistent breaches may result in termination or additional financial penalties.
Notification-based failure to comply clause
This clause relies heavily on transparent communication.
If non-compliance occurs, the defaulting party must notify the non-defaulting party immediately and provide a detailed explanation of the cause, impact, and proposed resolution. Failure to resolve within [insert number] days may result in penalties or termination.
Sector-specific failure to comply clause
This clause tailors remedies to industry standards.
Remedies for non-compliance will align with industry standards and best practices. For example, in the [insert industry] sector, breaches will require compliance audits, service credits, or other remedies deemed reasonable by both parties.
Performance metric failure to comply clause
This clause enforces compliance through measurable performance standards.
Non-compliance will be determined based on specific performance metrics outlined in the agreement. Failure to meet these metrics for [insert number] consecutive periods will result in penalties, suspension, or termination.
Progressive penalty failure to comply clause
This clause increases penalties over time for unresolved breaches.
For each [insert time period] of unresolved non-compliance, the defaulting party will face progressive penalties, including financial damages, performance bond requirements, or suspension of benefits under the agreement.
Public disclosure failure to comply clause
This clause addresses reputational impacts.
If non-compliance results in public disclosures, the defaulting party will bear all related reputational and financial damages. This includes costs for corrective communications, reputational audits, and future preventive measures.
Enhanced oversight failure to comply clause
This clause introduces stricter monitoring for repeated breaches.
In the event of repeated non-compliance, the non-defaulting party may impose enhanced oversight measures, including regular audits or reporting requirements, at the defaulting party’s expense. Continued breaches may result in termination.
Limited scope failure to comply clause
This clause restricts remedies to the affected areas of the agreement.
Remedies for non-compliance will apply only to the specific sections or obligations impacted by the breach, ensuring other unaffected provisions remain in force. Persistent breaches may broaden the scope of remedies or result in termination.
Timing-critical failure to comply clause
This clause applies stricter penalties for time-sensitive breaches.
For breaches affecting time-critical obligations, immediate corrective actions must be implemented within [insert number] hours. Failure to meet this deadline may result in significant penalties or expedited termination.
Workforce compliance failure to comply clause
This clause holds parties accountable for employee-related breaches.
The defaulting party is responsible for ensuring its workforce complies with the agreement’s terms. Any workforce-related non-compliance will be treated as a breach, requiring immediate corrective action or termination.
Confidentiality-specific failure to comply clause
This clause focuses on breaches of confidentiality obligations.
Non-compliance with confidentiality obligations will trigger immediate remedies, including damages and potential legal action. Failure to address the breach within [insert number] days may result in termination of the agreement.
Environmental compliance failure to comply clause
This clause applies to breaches of environmental standards.
Failure to comply with environmental obligations under this agreement will require immediate corrective actions and may result in penalties as outlined in applicable regulations. Continued breaches may lead to termination or reporting to regulatory authorities.
Milestone-based failure to comply clause
This clause ties remedies to missed project milestones.
Non-compliance with milestone-based obligations will result in penalties or renegotiation of the timeline. If the breach is not remedied within [insert number] days, the non-defaulting party may terminate the agreement or impose additional remedies.
Reimbursement-based failure to comply clause
This clause mandates reimbursement for losses caused by non-compliance.
In the event of non-compliance, the defaulting party agrees to reimburse the non-defaulting party for all direct and indirect losses incurred, including legal fees, operational costs, and any damages resulting from the breach. Repeated non-compliance may result in termination or additional penalties.
Revenue-sharing failure to comply clause
This clause ties remedies to revenue impacts.
If non-compliance affects revenue-sharing arrangements under this agreement, the defaulting party must pay the non-defaulting party the full value of the lost revenue or associated costs within [insert number] days. Continued breaches may trigger renegotiation or termination of the agreement.
Corrective training failure to comply clause
This clause emphasizes workforce remediation.
Non-compliance caused by the defaulting party’s workforce will require corrective training at the defaulting party’s expense. If the issue is not resolved within [insert number] days, additional measures, including termination, may be enforced.
Supply chain failure to comply clause
This clause targets breaches within supply chain obligations.
Non-compliance with supply chain obligations will require immediate corrective actions, such as substituting suppliers, revising timelines, or compensating for delays. Failure to resolve supply chain-related breaches may result in termination or penalties.
Insurance-triggered failure to comply clause
This clause uses insurance coverage as a remedy for breaches.
In the event of non-compliance, the defaulting party must provide evidence of sufficient insurance coverage to address any resulting damages or liabilities. If insurance coverage is deemed insufficient, the defaulting party will be required to pay any remaining costs directly.
Pre-termination failure to comply clause
This clause requires extensive remediation before termination.
Before termination due to non-compliance, the defaulting party must complete a series of corrective actions, including mediation, financial remediation, and submission of a compliance plan. Failure to meet these conditions may expedite termination and result in additional penalties.
Compliance bond failure to comply clause
This clause enforces compliance through financial guarantees.
The defaulting party must establish a compliance bond as security for any future breaches. Non-compliance will trigger claims against the bond, and continued breaches may result in additional financial penalties or termination.
Third-party audit failure to comply clause
This clause mandates external evaluation for breaches.
If non-compliance occurs, the defaulting party must agree to a third-party audit at its expense to identify the root cause and corrective measures. Failure to implement recommendations from the audit within [insert number] days may result in termination.
Intellectual property failure to comply clause
This clause addresses breaches related to IP obligations.
Non-compliance with intellectual property terms will result in immediate suspension of access to proprietary materials or systems. The defaulting party must resolve the issue within [insert number] days or face legal remedies, including termination of the agreement.
Exclusivity failure to comply clause
This clause applies to breaches of exclusivity provisions.
Failure to comply with exclusivity obligations will result in immediate penalties, including damages equivalent to the value of the breach. Continued non-compliance may lead to termination and additional remedies as specified in the agreement.
Penalty escalation failure to comply clause
This clause increases penalties over successive breaches.
For every subsequent instance of non-compliance, the defaulting party will incur escalating penalties, starting with [insert penalty amount]. Continued breaches will result in termination and claims for damages under applicable laws.
Dispute-driven failure to comply clause
This clause handles non-compliance during disputes.
Non-compliance during the resolution of disputes will result in interim penalties or suspension of agreement terms. Failure to comply with final dispute resolutions may lead to termination and additional remedies, including reimbursement of legal costs.
Warranty breach failure to comply clause
This clause covers non-compliance related to warranties.
Breaches of warranties under this agreement will require immediate corrective actions or compensation for damages caused. Persistent warranty-related breaches may result in termination or renegotiation of agreement terms.
Escrow-triggered failure to comply clause
This clause utilizes escrow funds as a remedy.
If non-compliance occurs, the defaulting party’s escrow funds will be used to cover damages or penalties. Continued breaches will require replenishment of escrow funds and may lead to termination if not resolved within [insert number] days.
Market disruption failure to comply clause
This clause addresses breaches causing market disruption.
Non-compliance that results in market disruption, such as pricing violations or unauthorized disclosures, will require immediate corrective actions. Failure to resolve such breaches within [insert number] days may result in penalties, termination, or reputational damages.
Employee conduct failure to comply clause
This clause holds the defaulting party accountable for employee actions.
Non-compliance caused by employee misconduct will require immediate corrective action and may include suspension of the agreement until the issue is resolved. Repeated breaches tied to employee behavior may result in termination or further penalties.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.