Survival Clause

Survival Clause Defined

Survival clauses, also known as survival within provisions, determine which contract provisions survive the termination of a contract agreement. In addition to survival clauses, these provisions may include severability clauses, termination clauses, and many more.

Survival Clause Explained

Survival clauses keep parts of the contract enforceable even after a contract ends. Survival as a statute of limitations does not extend beyond the mandated period.

Survival clauses are different from severability clauses in that they don’t address the legality of contract provisions. Instead, they protect a party’s rights after contract completion.

Purpose of Survival Clause

The purpose of survival clauses is to ensure that critical provisions remain in place after a contract terminates. This strategy guarantees the continuation of a party’s rights upon project or service completion.

Survival Clause Examples

Examples of survival clauses include:

• Example 1. Setting a case in arbitration as a form of alternative dispute resolution
• Example 2. Holding product developers responsible for their representations
• Example 3. Keeping trade secrets private through nondisclosure agreements

This article also covers survival clause examples.

Survival Clause Samples

Sample 1 – Purchase and Sale Contract

Survival. Except for (a) all of the provisions of this Article XIII (other than Sections 13.18 and 13.20); (b) Sections 2.3, 3.3, 3.4, 3.5, 4.5.5, 4.5.6, 5.4, 5.5, 6.2, 6.3, 6.5, 9.1, 9.2, 10.1, 10.2, 11.4, 14.1, and 14.2; (c) any other provisions in this Contract, that by their express terms survive the termination or Closing; and (d) any payment obligation of Seller or Purchaser under this Contract (the foregoing (a), (b), (c) and (d) referred to herein as the " Survival Provisions"), none of the terms and provisions of this Contract shall survive the termination of this Contract, and if the Contract is not so terminated, all of the terms and provisions of this Contract (other than the Survival Provisions, which shall survive the Closing) shall be merged into the Closing documents and shall not survive Closing. Nothing contained in any document delivered by Seller or Purchaser at Closing shall alter or affect the survivability provisions contained in this Contract.

Reference:

Security Exchange Commission - Edgar Database, EX-10.42 2 aipl2landmark_ex10z42.htm EXHIBIT 10.42, Viewed May 10, 2021, < https://www.sec.gov/Archives/edgar/data/711642/000071164209000488/aipl2landmark_ex10z42.htm >.

Sample 2 – Asset Purchase Agreement

Survival of Representations, Warranties and Covenants. The representations and warranties in Articles IV and VI shall survive through and until that date that is 365 days following the Closing Date; provided, however, that the Surviving Representations (as defined in Section 9.2 below) shall survive through and until that date that is 548 days following the Closing Date; provided further, that with respect to fraud or willful misrepresentation, and with respect to willful breach, the applicable representations and warranties shall survive indefinitely. Unless otherwise specified herein, covenants in this Agreement shall survive the Closing until such covenants are fully performed by the applicable party or waived by the beneficiaries thereof.

Reference:

Security Exchange Commission - Edgar Database, EX-2.1 2 dex21.htm ASSET PURCHASE AGREEMENT, Viewed May 10, 2021, < https://www.sec.gov/Archives/edgar/data/1428669/000119312510013625/dex21.htm >.

Sample 3 – Share Purchase Agreement

14. Survival of Representations, Warranties, Covenants and Indemnification Obligations.

14.1 General. Subject to Section 14.2, all representations, warranties, covenants and indemnification obligations of the Sellers contained in this Agreement, or made pursuant hereto, shall survive the Closing and

any investigation at any time made by or on behalf of any other Party for a period of fifteen (15) months after the Closing Date; provided, however, that the breaches of representations, warranties covenants and indemnification obligations relating to fraud and as to the representations and warranties contained in Sections 7.1, 7.2, 8.1, 8.2 and 8.3 shall not terminate but shall continue indefinitely. If any such claim shall have been made in writing and in accordance with the provisions of Section 13 and the Escrow Agreement prior to such expiration, such expiration shall not affect or in any way impair the rights of a Party to indemnification in respect of the particular matter as to which the claim was made, whether or not the amount of indemnification to which a Party is entitled in respect of such matter shall have been determined prior to such expiration.

14.2 Survival of Tax Liabilities. Sellers’ indemnification obligations with respect to Losses that result as a result of a breach of Section 7.24 relating to Taxes shall survive the Closing Date and any investigation of Purchaser until the expiration of the applicable statute of limitations.

Reference:

Security Exchange Commission - Edgar Database, EX-4.12 3 dex412.htm SHARE PURCHASE AGREEMENT, Viewed May 10, 2021, < https://www.sec.gov/Archives/edgar/data/1329394/000119312507148404/dex412.htm >.

Sample 4 – Asset Purchase Agreement

Survival.

(a) Except as expressly provided in this Section 8.1, the representations and warranties of Buyer, Seller and each Shareholder contained in this Agreement shall survive for a period of one (1) year after the Closing and shall terminate on such date, and all liability of Buyer, Seller and each Shareholder, as applicable, with respect to the representations and warranties in this Agreement shall thereupon be extinguished; provided, that:

(i) the representations and warranties contained in Section 4.1 (Corporate Existence and Power), Section 4.2 (Authorization; Qualification), Section 4.3 (Assets), Section 4.4 (Technology and Intellectual Property), Section 4.5 (Compliance with Laws), Section 4.6 (Environmental Compliance), Section 4.7 (Brokers), Section 4.8 (Employee Benefit Matters) and Section 4.9 (Seller Ownership Information) shall survive for eighteen (18) months after the Closing;

(ii) the representations and warranties contained in Section 4.10 (Taxes) and Section 4.11 (HSR Act) shall survive for the greater of one (1) year or the period of any applicable statute or statute of limitations; and

(iii) the representations and warranties contained in Section 5.1 (Organization and Existence), Section 5.2 (Corporate Authorization) and Section 5.5 (Brokers) shall survive for eighteen (18) months after the Closing.

The representations and warranties contained in Sections 8.1(a)(i) and 8.1(a)(ii) shall be referred to as the “Seller Material Representations.”

(b) Notwithstanding anything in this Section 8.1 to the contrary, if, prior to the expiration date of the applicable representation and warranty pursuant to Section 8.1(a), Seller shall have duly delivered a conforming Indemnification Claim Certificate to Buyer pursuant to the terms of Article VIII, then the specific indemnification claim set forth in such Indemnification Claim Certificate shall survive the expiration date of such representation and warranty and shall not be extinguished thereby until resolution of the matter pursuant to the terms of Article VIII.

(c) Notwithstanding anything in this Section 8.1 to the contrary, if, prior to the applicable expiration date of the applicable representation and warranty pursuant to Section 8.1(a), Buyer shall have duly delivered a conforming Indemnification Claim Certificate to Seller pursuant to the terms of Article VIII, then the specific indemnification claim set forth in such Indemnification Claim Certificate shall survive the expiration date of such representation and warranty and shall not be extinguished thereby until resolution of the matter pursuant to the terms of Article VIII.

(d) The covenants and agreements of Buyer, Seller and each Shareholder contained in this Agreement shall survive until fully discharged and performed and all liability of such Party with respect to such covenants shall thereupon be extinguished.

(e) All indemnification payments made under this Agreement shall be treated as adjustments to the Purchase Price.

Reference:

Security Exchange Commission - Edgar Database, EX-2.1 2 dex21.htm ASSET PURCHASE AGREEMENT, Viewed May 10, 2021, < https://www.sec.gov/Archives/edgar/data/1080866/000119312508111207/dex21.htm >.

Sample 5 – Asset Purchase Agreement

Survival of Representations, Warranties, Covenants and Agreements. The covenants and agreements of the parties to this Agreement and the other Transaction Documents, and the indemnities with respect thereto, including but not limited to the covenants and indemnities set forth in this Article 9, shall survive the Closing until they have been fully satisfied or otherwise discharged. All representations and warranties made by any party in this Agreement and the other Transaction Documents shall survive the Closing hereunder for the applicable period as set forth below (“Survival Period”) and any notice of a potential claim for breach of a representation or warranty must be initiated within the applicable Survival Period as follows:

(a) with respect to all covenants, representations and warranties in Section 4.8 (Tax; Tax Returns), until all applicable statutes of limitation shall have expired (giving effect to any extension or waiver thereof);

(b) with respect to the representations and warranties in Section 4.2 (Power and Authority; Enforceability), Section 4A.2 (Power and Authority; Enforceability), Section 4.3 (Title), and Section 5.2 (Power and Authority; Enforceability) (collectively, the “Fundamental Representations”), forever;

(c) with respect to the representations and warranties (i) in Section 4.18 (Environmental Matters), until three (3) years after the Closing Date and (ii) in Section 4.27 (Product Liability), until six (6) years after the Closing Date; and

(d) with respect to all other representations and warranties contained in this Agreement, including any schedule or exhibit attached hereto or any of the other Transaction Documents, until eighteen (18) months after the Closing Date.

Any obligations under Sections 9.2(a)(i) or 9.2(b)(i) shall not terminate with respect to any Losses as to which the Person to be indemnified shall have given notice (stating in reasonable detail the basis of the claim for indemnification) to the indemnifying party in accordance with Section 9.4 before the termination of the applicable Survival Period, except that the Indemnifying Party shall have no obligations to indemnify under Sections 9.2(a)(i) or 9.2(b)(i), as applicable, if the Indemnified Party fails to so notify the Indemnifying Party within the applicable Survival Period, regardless of whether the Indemnifying Party is actually prejudiced as a result of such failure.

Reference:

Security Exchange Commission - Edgar Database, EX-10.1 2 dex101.htm ASSET PURCHASE AGREEMENT, Viewed May 10, 2021, < https://www.sec.gov/Archives/edgar/data/92769/000119312510145775/dex101.htm >.

Common Contracts with Survival Clauses

Common contracts with survival clauses include:

• Partnership agreements
• Licenses contracts
• Employment contracts
• Nondisclosure agreements
• Confidentiality agreements
• Research contracts
• Mergers & acquisitions contracts
• Arbitration agreements

Survival Clause FAQs

Survival clauses will keep critical aspects of your contract intact. Check out the survival FAQs below to learn more:

What is a survival clause in real estate?

Survival clauses in real estate are drafted to guarantee that the seller’s representations are accurate, even after a contract’s closing. The nature of sale underscores the importance of accuracy and honesty when selling residential or commercial property.

Are survival clauses necessary?

Survival clauses are only compulsory in specific contracts, such as a nondisclosure agreement or confidentiality agreement. If you want to ensure that your trade secrets remain a secret, ensure that you utilize survival clauses properly. Otherwise, you may lose your legal privacy rights, and subsequently, your competitive advantage as an organization.

What clauses survive termination?

Clauses that survive termination include obligations around breach of contract disputes, substantive procedures, or secondary obligations. Other rights may survive termination as well, including a right to damages and contract performance.

If you have questions about survival clauses or contract law, contract lawyers can answer your questions and provide legal advice from start to finish.