contract-law
Termination of Agreement clause. Why allow a contractor/employee to be able to use it?
<p>I was presented a contract with an NDA; non-compete and a bunch of other stuff in it. One of clauses in it was this:</p>
<blockquote>
<p>Duration. This Agreement shall be in force and effect until December
31, 2027; provided, however, that this Agreement may be terminated by
either party upon ten (10) days written notice.</p>
</blockquote>
<p>Only one other clause, the non-compete, indicates that it survives the part termination:</p>
<blockquote>
<p>Covenant Not To Compete. During the term of this Agreement and for a
period expiring two (2) years after the termination of this Agreement for any reason,
Contractor covenants and agrees that Contractor will not:</p>
</blockquote>
<p>[.. and the definition of competition stuff follows thereafter]</p>
<p>No other part of the Agreement indicates that is survives for any period after the termination of the Agreement, so can any other part be in effect if the Agreement is past 10 days termination? For example, 10 days after I terminate the Agreement I understand that I no longer agree to a clause such as:</p>
<blockquote>
<p>Attorney’s Fees. In the event that either party hereto should employ the
services of an attorney in connection with a breach of this Agreement or the
enforcement of the terms hereof, the defaulting or losing party shall pay, in addition to
any other sums due hereunder, the other or prevailing party’s reasonable attorney’s
fees, costs and expenses</p>
</blockquote>
<p>Doesn't termination of the Agreement mean what it says in that it terminates everything (except that which it specifically says will survive termination for a certain duration such as the non-compete?)</p>

<blockquote>
<p>No other part of the Agreement indicates that is survives for any period after the termination of the Agreement, so can any other part be in effect if the Agreement is past 10 days termination?</p>
</blockquote>
<p>Easily. The fact that one part specifies how long it stays in effect after termination by no means means that any other part (that does not specify so) ceases in effect upon termination.</p>
<p>Specifying &quot;2 years&quot; in the NDA clause is necessary: the duration cannot be figured out otherwise.</p>
<p>Specifying how long a clause about legal costs in a possible legal battle between the parties applies would not make any sense: such a legal battle can happen at <em>any</em> time, and so the clause is meant to apply at such time whenever it happens.</p>
<blockquote>
<p>Doesn't termination of the Agreement mean what it says in that it terminates everything</p>
</blockquote>
<p>No. The termination of an agreement only terminates what the agreement was <em>purported</em> for.</p>

<h2>The general rule is that the terms of a contract do not survive termination unless this is explicit</h2>
<p>However, the rights and obligations that accrued prior to termination still exist.</p>
<p>If a dispute arose before termination, the clause about costs would apply no matter how long it took to resolve the dispute. If the dispute arose after termination (say about the NDA) it wouldn’t and costs would be awarded by the normal process in the jurisdiction.</p>
<p>One final point. An arbitration clause in a contract is a <em>separate</em> agreement- it would survive termination because it’s not actually part of the contract.</p>
