Survival of terms: Overview, definition, and example
What is survival of terms?
Survival of terms refers to a clause in a contract that ensures certain provisions remain in effect even after the contract has ended or been terminated. These terms typically include confidentiality, indemnification, dispute resolution, or liability limitations, which are meant to extend beyond the contract’s expiration to protect the interests of the parties involved.
For example, a confidentiality obligation might continue for two years after a contract ends to ensure sensitive information remains protected.
Why is survival of terms important?
Survival of terms is important because some obligations or protections need to remain effective after the contract ends to safeguard the parties’ rights and prevent disputes. Without this clause, critical provisions like confidentiality or indemnification may be unenforceable once the agreement is terminated, leaving businesses vulnerable to risks.
For SMBs, this clause ensures continuity in protecting intellectual property, sensitive information, and other long-term obligations, helping to minimize risks after the contractual relationship concludes.
Understanding survival of terms through an example
Imagine a business hires a consultant to develop a marketing strategy. The contract specifies that the consultant must keep all proprietary information confidential. Even after the agreement ends, the survival of terms clause ensures that the confidentiality obligation remains enforceable for a defined period, such as two years.
In another scenario, a supplier agreement includes an indemnification provision stating that the supplier will cover any losses arising from defective goods. If a claim arises after the contract ends, the survival of terms clause ensures that the indemnification obligation remains valid and enforceable.
An example of a survival of terms clause
Here’s how a survival of terms clause might appear in a contract:
“The provisions of this Agreement that by their nature are intended to survive termination, including but not limited to confidentiality, indemnification, dispute resolution, and limitation of liability, shall remain in full force and effect after the expiration or termination of this Agreement.”
Conclusion
A survival of terms clause ensures that critical obligations or protections continue to apply even after a contract ends. For SMBs, this clause is essential for safeguarding sensitive information, enforcing long-term responsibilities, and mitigating risks that might arise after the contractual relationship has concluded. Including this provision in contracts provides clarity and peace of mind for both parties.
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.