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Amrendra Kumar Saha
- Experienced Procurement And Contract Management Professional
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Hi , Greetings Drafting of survival clause needs detailed study of any contract but in general the followings will help in making proper drafting of Survival clause As per Indian contract Act there is no direct Provision related with Survival clause. But this clause is must clause in most of the contract and is indirectly covered in section -1 of Indian contract Act as ldquoSaving clauserdquo Survival clause covers the situations after termination of the contract either before completion of contractual obligations or after completion of contractual obligation. This clause is the way for Risk mitigation for expressed Risk or Implied Risk as per nature of contracts. To draft Survival clause needs complete understanding of Purpose of Contract and affecting situation even after termination of contract as explained above. There may be several ways to draft ldquoSurvival clauserdquo Examples A The Simplest form is as below but this clause needs very clear description about Rights and Obligations to be covered in contract to avoid any different interpretation. ldquoRights and obligations under this Agreement which by their nature should survive, including, but not limited to any and all payment obligations invoiced prior to the termination or expiration hereof, will remain in effect after termination or expiration hereof.rdquo B Regardless of anything expressed anywhere in this agreement, all obligations of the each party to other survive until fulfilled.rdquo C The more elaborate and descriptive Survival clause covers the Expressed and Implied clauses and their reference in terms of clause no or sub-clause no to avoid wrong interpretation. After termination or expiry of an agreement it is possible that some clauses will continue in force ndash either for a defined period, or for ever. There are a number of ways to deal with these so-called ldquosurvival clausesrdquo. One that we will encounter is to say that ldquoAny clause expressly or impliedly intended to survive the termination or expiry of this agreement shall do so.rdquo As per my understanding . ldquoExpressly intendedrdquo is fine ndash if we state expressly that a particular provision will survive termination, thatrsquos nice and clear and everyone knows where they stand. The issue with ldquoimpliedly intendedrdquo is that different parties may well have different views on what is ldquoimpliedrdquo it needs negotiation with other party For this reason, we tend to prefer to list out the survival clauses individually. We can cover Survival clause in most simplistic way with concept of expressly intended as below After termination or expiry of an agreement/ Contract the following clause clauses will continue in force ndash either for a defined period, or for ever. Period depends upon the nature of contract Examples of clauses that commonly survive termination and expiry are Taxes Warranties/ support services Insurance Confidentiality Data protection Security requirements Knowledge transfer/ Training Audit and Access Requirements Transition out support 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 Indemnification IPR- Infringement Order of Precedence etc. But these might not all be relevant in your contract, so do check through each clause individually and make sure you choose those that really need to survive. Special Tips So how do we know which clauses should survive termination or expiry When the agreement is more or less finished, walk through it clause by clause. As we review each clause, ask the question ldquoIs there any reason why this provision needs to continue after termination If the answer is ldquoyesrdquo, consider how that provision would actually work in the post-termination universe. If we are comfortable that it should indeed survive, list it in our survival clause. This helps in making expression of clauses which will be covered in Survival clause. Regards, A.K.SAHA
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