The Survival Clause Surprise: What Lives On After the Contract Ends

Most business owners assume that once a contract expires or terminates, their obligations end too. But many agreements include a survival clause—a provision that keeps certain duties alive long after the rest of the contract is gone. The result? You may be bound for years without realizing it.

What Is a Survival Clause?

A survival clause specifies which obligations continue even after termination. These often include confidentiality, indemnification, payment, or liability limitations. The idea is to preserve obligations that are meant to outlast the deal itself—but the scope is often far broader than parties expect.

The Surprise Factor

Clients often ask: “If the contract is over, why am I still on the hook?” The answer is in the fine print. Survival clauses can make confidentiality last forever, keep indemnity obligations alive for years, or extend liability caps well past the contract’s end date. In litigation, these provisions become powerful tools for the party who drafted them.

Common Obligations That Survive

• Confidentiality: Often drafted with no end date, effectively binding you permanently.
• Indemnification: Requires you to defend or pay claims long after the contract ends.
• Warranties: Extended warranty or service obligations that go beyond the contract term.
• Payment Obligations: Unpaid amounts or penalties continue until satisfied.
• Limitation of Liability: Caps on damages that continue to protect the breaching party after termination.

Why Survival Clauses Are Risky

1. They Create Hidden Liability: You may be responsible for obligations long after you thought you were free.
2. They Can Be One-Sided: Often, only the other party’s protections survive, not yours.
3. They Outlast Business Relationships: Even when the deal ends badly, your duties may continue.

How to Protect Yourself

• Set Time Limits: Define confidentiality or indemnity survival in months or years, not “forever.”
• Balance Survival Obligations: Ensure your rights (like indemnification or fee recovery) survive too.
• Review Carefully at Termination: Know exactly what continues before walking away from a deal.
• Negotiate Narrowly: Limit survival only to obligations that truly need to outlast the contract.

Don’t Let a Contract Haunt You After It Ends

At JDE Law Firm, PLLC, I help clients negotiate survival clauses so they don’t become surprise liabilities. If your contract is ending—or if you’re about to sign one—make sure you know what obligations will follow you long after the ink is dry.

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