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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:

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.

Only one other clause, the non-compete, indicates that it survives the part termination:

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:

[.. and the definition of competition stuff follows thereafter]

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:

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

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?)

  • The answer to the last question is "yes"; the answer to the title question is "because the parties want to be free to quit / fire". Without that clause, you'd be stuck for 7 years. I don't understand what you are asking. – user6726 Jun 26 at 15:41
  • Greendrake understands and his answer makes complete sense. – StartupGuy Jun 26 at 18:23
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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?

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.

Specifying "2 years" in the NDA clause is necessary: the duration cannot be figured out otherwise.

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 any time, and so the clause is meant to apply at such time whenever it happens.

Doesn't termination of the Agreement mean what it says in that it terminates everything

No. The termination of an agreement only terminates what the agreement was purported for.

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  • This is the exact opposite of Dale's anwer. How can we be so far off? – StartupGuy Jun 27 at 14:12
  • @StartupGuy jurisdiction-specific case law may sway the right answer one way or the other. – Greendrake Jun 27 at 16:08
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The general rule is that the terms of a contract do not survive termination unless this is explicit

However, the rights and obligations that accrued prior to termination still exist.

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.

One final point. An arbitration clause in a contract is a separate agreement- it would survive termination because it’s not actually part of the contract.

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  • Not sure why this was downvoted as it is useful; for terms to live on past the termination of an agreement, they must be explicit. The other answer appears to miss this point. – A.fm. Jun 27 at 2:49
  • Yeah, I would also be curious why it would be down voted. Also, this answer is in conflict with the answer from @Greendrake, so who is correct then? Both answers make sense in their own way. – StartupGuy Jun 27 at 14:02

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