The lifebelt represents the survival provisions in the contract.
As we saw in the revolver, after termination or expiry of an agreement it is possible that some clauses will continue in force – either for a defined period, or for ever.
There are a number of ways to deal with these so-called “survival clauses”. One that you will encounter is to say that “Any clause expressly or impliedly intended to survive the termination or expiry of this agreement shall do so.”
This is, in our view, a bit of a fudge. “Expressly intended” is fine – if you state expressly that a particular provision will survive termination, that’s nice and clear and everyone knows where they stand. The issue with “impliedly intended” is that different parties may well have different views on what is “implied”.
For this reason, we tend to prefer to list out the survival clauses individually.
So how do you know which clauses should survive termination or expiry?
When the agreement is more or less finished, walk through it clause by clause. As you review each clause, ask the question “Is there any reason why this provision needs to continue after termination?”. If the answer is “yes”, consider how that provision would actually work in the post-termination universe. If you’re comfortable that it should indeed survive, list it in your survival clause.
Examples of clauses that commonly survive termination and expiry are:
- data protection
- payment (in respect of work done/goods supplied pre-termination)
- limits and exclusions of liability
- clauses setting out what happens post-termination
- applicable law and jurisdiction
- But these might not all be relevant in your agreement, so do check through each clause individually and make sure you choose those that really need to survive.
Want to know more? Contact Devant for contract assistance!