Directly or indirectly: Overview, definition, and example
What does "directly or indirectly" mean?
The phrase "directly or indirectly" is a common legal and contractual term that is used to extend the scope of a specific obligation, action, or condition. It means that the described action or effect can occur either through immediate, straightforward means ("directly") or through intermediate or less obvious means ("indirectly"). The purpose of this phrase is to ensure that the language covers a broader range of potential circumstances, actions, or effects, including those that may not be immediately obvious or that happen through a third party.
For example, when a contract states that a party is prohibited from engaging in certain activities "directly or indirectly," it is ensuring that the restriction applies not just when the party personally engages in the activity but also when they do so through other means or via intermediaries.
Why is "directly or indirectly" important?
The phrase "directly or indirectly" is important because it helps ensure clarity and comprehensiveness in legal agreements. Without this phrase, parties might exploit gaps or technicalities in the wording to circumvent the terms of the contract. By including "directly or indirectly," the language makes sure that the obligations, restrictions, or permissions described in the agreement apply to all relevant actions, even if they are not immediately obvious or are carried out through a third party.
This is particularly important in areas such as non-compete clauses, intellectual property agreements, and confidentiality agreements, where actions taken through intermediaries or other parties can still be relevant to the enforcement of the agreement.
Understanding "directly or indirectly" through an example
Imagine a non-compete clause in an employment agreement that reads: "The Employee agrees not to engage in any business activity that competes with the Employer, directly or indirectly, for a period of two years after termination of employment." This means the employee is prohibited from starting a competing business themselves ("directly") and also from working for a competitor or assisting a competitor in any way, such as advising or facilitating their operations ("indirectly").
In another example, a contract for the sale of intellectual property might state that the seller cannot disclose proprietary information "directly or indirectly" to a third party. This would cover the scenario where the seller shares the information with another person (directly) or where they use an intermediary, such as a consultant, to disclose the information without the buyer’s consent (indirectly).
An example of "directly or indirectly" clause
Here’s how a "directly or indirectly" clause might appear in a contract:
"The Party agrees not to solicit or accept business from any of the Company’s clients, directly or indirectly, during the term of this Agreement and for a period of one year thereafter. This prohibition applies to both direct contact with clients and any action taken through an intermediary or third party."
Conclusion
The phrase "directly or indirectly" is a crucial legal term used to broaden the scope of obligations, restrictions, or actions described in contracts and agreements. It ensures that the intent of the contract applies to both immediate actions and those that may occur through other means or via intermediaries. By using this phrase, parties can make their agreements more comprehensive, preventing potential loopholes and ensuring that all actions, whether direct or mediated, are covered.
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.