Your risks don't end when your contract does

When your contract ends, your risk may not.

How does that work?  There’s a tricky concept known as post-termination obligations.

With large projects, the risk doesn’t simply disappear once you sign off on the final deliverable; it sticks around.

What happens if your contract lacks a survival clause? The risk can actually increase.

This is an area where many new founders make mistakes. They often assume that protections like confidentiality and intellectual property (IP) ownership last indefinitely.

However, that’s not the case unless you clearly state it in your contract.

The Common Scenario

What normally ends up happening is:

Suppose you’re a software developer who has just completed a major project for a fintech client.

The contract officially ends, and two months later, you hear troubling news: sensitive code you shared is being leaked.

You contact the client, demanding action.

Their lawyer responds, saying, “There is no survival clause. Your confidentiality obligation ended with the contract.”

Just like that, you find your hands are tied.

This situation is not even hypothetical; it happens. Too often, people underestimate what occurs after a contract ends.

The Two Big Risks You Can’t Ignore

1) Lack of Protection

One big risk with confidentiality agreements is that they often lack a survival clause.

Once a contract ends, all the protections for sensitive information can just disappear.

If that happens, you could end up exposing your confidential info or trade secrets, which can seriously hurt your business or professional reputation.

2) Intellectual Property Disputes

Another major concern is around intellectual property (IP) rights.

If your contract doesn’t clearly state who owns or can use the intellectual property created during the project after it wraps up, you might find yourself in a tricky spot.

This can lead to arguments about who really controls the work you made.

That kind of confusion can turn into expensive legal fights that might put your financial stability at risk and mess up the trust you’ve established with your clients and partners.

Both of these issues can lead to serious problems, costing you not just time and money but also the trust that’s crucial for maintaining professional relationships.

My Ways To Fix It

The answer? Having a good survival clause in your contracts. Here’s my simple guide to help you put together a strong survival clause:

a) Pinpoint the Important Clauses

Start by figuring out which key parts of the contract you want to last even after it ends. Here are a few vital areas to look at:

- Confidentiality: It’s super important to keep any sensitive info that gets shared private.

Clearly say what counts as confidential and how it should be handled.

For example, you might want confidentiality to stick around for five years after the contract ends to keep your trade secrets safe.

- Intellectual Property (IP) Rights: Make sure to spell out who owns any inventions or creative work that comes out of the deal.

This will help avoid any future arguments over who gets what.

- Liability: Set clear limits on what risks and responsibilities each party has.

This part should explain how far you’re willing to go if things go south, maybe including caps on damages to make sure everyone knows the maximum risks involved.

- Indemnity: This clause helps protect you from legal trouble that could pop up after the contract wraps up.

Clearly outline what each party is responsible for regarding indemnity, ideally making this last indefinitely to cover any claims or losses that might come your way later on.

b) Clearly Define the Duration

Being specific is key when talking about how long these clauses last.

Avoid vague language to prevent mixed signals down the line. Instead, set clear timelines for each clause:

- Confidentiality: For example, you might want the confidentiality obligation to stick around for at least five years after the contract is over.

This gives you a solid window to protect sensitive info.

- Indemnity: Think about whether you want this clause to last forever, giving you ongoing protection against potential legal claims.

This is especially handy for longer projects or ongoing partnerships.

The Lesson

While contracts have an endpoint, the risks often stick around long afterward.

A well-done survival clause keeps your important protections active and enforceable, even after the contract's done.

Without it, you could leave yourself wide open to issues. But with a solid survival clause in place, you’ll feel more secure tackling any challenges that come your way.

Remember, being clear and specific will help you create a robust survival clause that protects your interests.

Because a good contract doesn’t just protect you while it’s active.

It protects you long after it’s over.

If you need my help with any of this, you can either reply to this Email or Reach out to me on Linkedin :)