Incapacity clause: Copy, customize, and use Instantly
Introduction
An incapacity clause explains what happens if a party—or an individual representing a party—is unable to perform their contractual duties due to physical, mental, or legal incapacity. It helps address continuity, define notice procedures, and clarify how the agreement proceeds in the event of temporary or permanent incapacity. This clause is especially important in service-based agreements, partnerships, or contracts involving key individuals.
Below are templates for incapacity clauses tailored to different scenarios. Copy, customize, and insert them into your agreement.
Standard incapacity clause
This version outlines the basic steps to take when a party becomes incapacitated.
If a party becomes incapacitated and is unable to fulfill its obligations under this agreement, the other party shall be notified in writing and may suspend performance until capacity is restored or alternative arrangements are made.
Key individual incapacity clause
This version addresses incapacity of a specific person essential to the agreement.
If [Name or Title], whose personal services are a material part of this agreement, becomes incapacitated and unable to perform, the other party may terminate this agreement with [X] days’ notice, without liability.
Temporary incapacity clause
This version allows for a suspension of obligations during short-term incapacity.
In the event of temporary incapacity, the affected party shall provide written notice and may suspend its obligations for up to [X] days. After that period, the parties shall review the situation and determine how to proceed.
Successor or delegate clause
This version allows another person to take over if the original party is incapacitated.
If a party is incapacitated, it may appoint a qualified successor or delegate to perform its obligations, subject to the other party’s written approval, which shall not be unreasonably withheld.
Permanent incapacity clause
This version gives the right to terminate if the incapacity is long-term or irreversible.
If a party is permanently incapacitated, or an essential individual is unable to perform for more than [X] days, either party may terminate this agreement without further obligation except for amounts accrued prior to termination.
Medical incapacity clause
This version addresses incapacity due to medical illness or injury.
If a party or key individual is medically incapacitated and unable to perform obligations under this agreement, the other party shall be notified promptly, and performance may be suspended for up to [X] days pending recovery or reassignment.
Mental incapacity clause
This version covers incapacity arising from mental health conditions.
If a party or designated individual is deemed mentally incapacitated by a licensed medical professional, obligations under this agreement may be temporarily suspended or reassigned, subject to mutual agreement.
Incapacity notice requirement clause
This version requires formal notice of incapacity.
The incapacitated party shall provide written notice of their condition as soon as reasonably possible, including a description of the impact on performance and any anticipated duration of the incapacity.
Third-party confirmation clause
This version requires a third-party verification of incapacity.
Any claim of incapacity under this agreement must be supported by a written statement from a licensed medical or legal professional confirming the inability to perform.
Incapacity with automatic suspension clause
This version automatically pauses performance upon notice of incapacity.
Upon receipt of notice of incapacity, obligations of the affected party shall be automatically suspended for up to [X] calendar days, during which time both parties will determine how to proceed.
Incapacity with force majeure alignment clause
This version aligns incapacity with force majeure principles.
Incapacity shall be treated as a force majeure event under this agreement if it materially prevents performance and is not the result of the party’s own negligence or misconduct.
Co-signatory incapacity clause
This version addresses incapacity when two individuals are jointly responsible.
If one co-signatory becomes incapacitated, the remaining signatory shall assume full responsibility unless otherwise stated in the agreement or by written amendment.
Incapacity of representative clause
This version covers the incapacity of an authorized signatory or agent.
If the authorized representative of a party becomes incapacitated and no replacement is designated within [X] days, the other party may suspend or terminate the agreement upon written notice.
Executor clause in case of death or incapacity
This version prepares for death or legal incapacity.
In the event of death or legal incapacity of a party, their executor, legal guardian, or personal representative may assume rights and responsibilities under this agreement, subject to approval by the other party.
Time extension for incapacity clause
This version grants a time extension if incapacity prevents timely performance.
If a party is unable to meet deadlines due to incapacity, the time for performance shall be extended by a period equal to the duration of the incapacity, not to exceed [X] days.
Confidentiality of incapacity details clause
This version protects the privacy of the incapacitated party.
Information regarding a party’s incapacity shall remain confidential and shall only be disclosed to those necessary to administer the terms of this agreement or comply with applicable law.
Incapacity during notice period clause
This version addresses incapacity during contract termination or renewal.
If a party becomes incapacitated during a notice period for termination or renewal, the notice period shall be paused until the incapacity is resolved or a successor is appointed.
Incapacity reimbursement clause
This version allows the other party to recover costs during a period of incapacity.
If a party becomes incapacitated and this results in documented additional costs for the other party, such costs may be reimbursed by the incapacitated party or their representative.
Incapacity beyond reasonable period clause
This version defines when incapacity becomes excessive.
If incapacity continues beyond a period of [X] days, and materially affects performance, either party may terminate the agreement upon written notice, with no further liability except for prior obligations.
Training a replacement during incapacity clause
This version allows the incapacitated party to designate a trainee or interim.
During periods of incapacity, the affected party may nominate a qualified replacement to assume duties, and shall provide necessary training or documentation to support transition.
Legal incapacity clause
This version covers incapacity due to legal restriction or incompetence.
If a party is declared legally incapacitated or incompetent by a court of competent jurisdiction, the agreement may be suspended or terminated at the election of the other party.
Government official incapacity clause
This version applies to contracts involving public officials.
If a government official integral to this agreement becomes incapacitated, the agency may assign an authorized replacement or terminate the agreement without penalty.
Professional incapacity clause
This version addresses loss of license or professional standing.
If a party or individual is unable to perform due to loss of professional license or disciplinary suspension, the agreement may be suspended or terminated as appropriate.
Business owner incapacity clause
This version is tailored for small business agreements.
If the sole owner or controlling member of a business becomes incapacitated and no successor is named within [X] days, the agreement may be terminated without further obligation.
Partnership incapacity clause
This version addresses incapacity in a general partnership.
If any partner becomes incapacitated, the remaining partners may elect to continue the agreement or dissolve the partnership and settle obligations.
Incapacity buyout clause
This version provides an option to buy out the incapacitated party’s interest.
In the event of permanent incapacity, the remaining party may purchase the incapacitated party’s interest or responsibilities under the terms outlined in this agreement.
Equity holder incapacity clause
This version is for agreements involving equity or ownership stakes.
If an equity holder becomes incapacitated, their voting rights and profit participation shall transfer to their designated proxy or legal representative, subject to applicable laws and company policies.
Incapacity with deferred termination clause
This version allows delayed termination after extended incapacity.
If incapacity continues for more than [X] days, the other party may issue a deferred termination notice, effective [Y] days after delivery, unless the issue is resolved in the interim.
Caregiver clause
This version allows a designated caregiver to act temporarily.
If a party is incapacitated, a designated caregiver or temporary agent may perform non-discretionary functions related to this agreement until the party resumes capacity or a permanent substitute is named.
Incapacity tied to performance metrics clause
This version links incapacity to missed targets.
If incapacity causes the affected party to miss key performance targets for two consecutive periods, the other party may request reassignment or terminate the agreement.
Incapacity due to travel restriction clause
This version applies when incapacity results from inability to travel.
If a party is incapacitated due to legal or medical travel restrictions, the agreement may be suspended or adjusted until travel becomes possible or a remote performance alternative is arranged.
Incapacity and insurance coverage clause
This version links incapacity to required insurance provisions.
Each party shall maintain appropriate insurance coverage to cover risks arising from incapacity. Any incapacity that triggers an insurance claim shall be managed in accordance with the policy terms.
Interim replacement clause
This version enables a temporary replacement during incapacity.
If a party or key individual becomes incapacitated, the parties shall cooperate in appointing a mutually acceptable interim replacement to ensure continuity of obligations.
Incapacity and force reassignment clause
This version allows the other party to reassign duties if performance stops.
If a party is incapacitated for more than [X] days, the other party may reassign the relevant duties to a third party and deduct associated costs from future payments or credits.
Business continuity planning clause
This version requires advance planning for incapacity events.
Each party agrees to maintain a business continuity plan, including designation of successors or alternates, to minimize disruption in the event of incapacity.
Incapacity and deferred compensation clause
This version delays payments until capacity is restored.
If a party becomes incapacitated and cannot perform, payment obligations related to such performance may be deferred until the party resumes duties or a replacement is appointed.
Incapacity related to pandemic clause
This version addresses incapacity caused by pandemic conditions.
If a party is incapacitated due to pandemic-related illness or public health restrictions, the agreement may be suspended for up to [X] days or until conditions allow resumption.
Capacity reassessment clause
This version requires periodic review of the party’s condition.
In cases of long-term or uncertain incapacity, the parties agree to reassess capacity status every [X] days and determine next steps in good faith.
Incapacity with notification trigger clause
This version clarifies when the clause becomes active.
This clause shall only apply if the party’s incapacity is expected to last more than [X] days or materially affects the ability to meet key obligations.
Discretionary termination for incapacity clause
This version gives broad discretion to terminate.
Either party may terminate this agreement if the other party becomes incapacitated and continuation is no longer commercially practical.
Board or leadership incapacity clause
This version addresses agreements with companies led by a board.
If a majority of board members or executive leadership becomes incapacitated and no interim leadership is installed within [X] days, the agreement may be paused or terminated.
Incapacity and trust clause
This version handles incapacity using a trust or proxy system.
In the event of incapacity, rights and responsibilities under this agreement shall be exercised by the party’s named trustee, proxy, or agent, as designated in advance in writing.
Incapacity record-keeping clause
This version requires documentation of incapacity events.
Each party shall maintain appropriate records documenting the onset, duration, and resolution of any incapacity affecting performance, and share such records upon request.
Incapacity with deferred onboarding clause
This version is for agreements not yet started.
If incapacity occurs before the start of the performance period, onboarding or project launch shall be deferred until the incapacitated party is able to participate.
Statutory incapacity clause
This version refers to statutory definitions of incapacity.
Incapacity shall be defined in accordance with [State/Country] law, and any steps taken under this clause shall comply with applicable legal requirements.
Mutual incapacity clause
This version handles both parties being incapacitated.
If both parties are simultaneously incapacitated and unable to perform their obligations for more than [X] days, the agreement shall be suspended until capacity is restored or terminated upon mutual consent.
Incapacity substitution clause
This version allows substitution with a pre-approved alternate.
If a party becomes incapacitated, a pre-approved substitute listed in the agreement’s annex may step in and perform duties without delay or need for renegotiation.
Incapacity cap clause
This version sets a maximum allowable period for incapacity.
Incapacity of any party or individual may not exceed [X] cumulative days within a [Y]-month period. Exceeding this cap shall trigger a right to renegotiate or terminate.
Incapacity arbitration clause
This version directs incapacity disputes to arbitration.
Any disagreement regarding the presence or consequences of incapacity shall be submitted to binding arbitration under the rules of [Arbitration Body].
Incapacity clause tied to critical path
This version applies when incapacity delays a key milestone.
If a party’s incapacity causes a delay in a critical milestone listed in the project timeline, the other party may adjust the timeline, reassign the task, or terminate that milestone.
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.