Duty to notify: Overview, definition and example
What is a duty to notify clause?
A duty to notify clause in a contract requires one party to inform the other party about certain events, changes, or issues that could impact the agreement. This clause is meant to ensure that both parties are aware of important developments and can take appropriate action.
For example, a business might include a duty to notify clause in a lease agreement, where the tenant must inform the landlord of any damage to the property within a set time frame.
Why is a duty to notify clause important?
A duty to notify clause is important because it ensures that all relevant parties are kept informed about significant events or issues that could affect their rights or obligations under the contract. By setting clear expectations for timely communication, it helps prevent misunderstandings and potential disputes.
This clause helps both parties take action to address problems early, reducing the risk of bigger issues down the line.
Understanding a duty to notify clause through an example
Imagine a software company enters into a service contract with a client, where the contract includes a duty to notify clause. The clause requires the software company to inform the client of any issues with the software’s performance or updates within 10 business days of discovering the problem.
Six months into the contract, the company notices a software bug that could affect the client's operations. Because of the duty to notify clause, the company informs the client immediately, allowing them to take corrective action before the issue escalates.
An example of a duty to notify clause
Here’s how a duty to notify clause might look in a contract:
“The Supplier shall notify the Client in writing within ten (10) business days of becoming aware of any event, circumstance, or situation that may materially affect the performance of the services under this Agreement.”
Conclusion
A duty to notify clause helps ensure that both parties are informed about any developments that may impact their responsibilities under the contract. It fosters clear communication and allows both parties to address issues promptly, minimizing the risk of future complications. When entering into contracts, it’s essential to include a duty to notify clause to maintain transparency and ensure smooth cooperation.
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.