TIL everyone's obsessed with 'termination for convenience' clauses but they're missing the real killer

I keep seeing people focus on the exit clause while ignoring the 'survival' section that keeps obligations alive forever. My last contract had a confidentiality term that survived for 5 years post-termination, which is a huge liability if you're not tracking it. Anyone else get burned by a sneaky survival clause they didn't negotiate?

4 comments

4 Comments

dixon.david2mo ago

Honestly, the two year hard cap Andrew mentioned is the only way to go. It forces the other side to actually use the info or bring a claim, not just sit on it. The_riley's three year mess shows how that extra time just lets problems fester. Tbh, if they push for longer, you have to ask what they're really planning to do with your secrets for half a decade. I'd walk away before agreeing to anything open ended.

andrew_shah2mo ago

Yeah, always add a hard cap on survival periods, like two years max.

the_hayden18d ago

forces a real decision" - that's exactly the problem with a hard cap. It forces someone to make a bad decision before they have all the facts. I've seen it happen. Company A acquires Company B, finds out B had a lawsuit brewing but the survival clause was only 18 months. By month 20 when the suit lands, they've got zero recourse even though the liability clearly existed during the deal. Two years is fine for simple asset purchases where you already know what you're getting. But for anything with ongoing regulatory exposure or long-tail liabilities like environmental stuff, you need at least four or five years. The "forces a real decision" logic works great until you're the one left holding the bag because you couldn't finish the due diligence in time. Sometimes problems don't surface until year three, and a hard cap just lets the other side off the hook for stuff they knew about.

the_riley2mo ago

We had a three-year survival clause on a deal that went sideways. It dragged out forever and killed the renewal. Two years is the absolute sweet spot, forces a real decision.