Non-performance clause: Copy, customize, and use instantly
Introduction
A non-performance clause specifies the actions or consequences that will arise if one party fails to fulfill its obligations under the contract. This clause defines what constitutes non-performance, the remedies available, and any penalties or conditions triggered by non-performance. It helps protect both parties by establishing clear expectations and remedies for failure to perform.
Below are templates for non-performance clauses tailored to different scenarios. Copy, customize, and insert them into your agreement.
Standard non-performance clause
This version sets the basic terms for non-performance.
In the event that [Party B] fails to perform any of its obligations under this Agreement within the specified timeframes, [Party A] may, at its discretion, either terminate this Agreement or demand performance. If the failure continues for more than [X] days, [Party B] will be liable for all damages incurred by [Party A] due to non-performance.
Non-performance clause with provision for notice of default
This version includes a notice requirement.
If either party fails to perform any material obligation under this Agreement, the non-breaching party must send a written notice of default. If the defaulting party does not remedy the failure within [X] days of receiving the notice, the non-breaching party may terminate the Agreement and seek damages.
Non-performance clause with provision for suspension of obligations
This version allows suspension of obligations.
If [Party B] fails to perform any of its obligations, [Party A] may suspend its own performance under this Agreement until the default is remedied. If the default is not cured within [X] days, [Party A] may terminate the Agreement and seek compensation for any damages resulting from non-performance.
Non-performance clause with provision for liquidated damages
This version applies liquidated damages.
If either party fails to perform their obligations as outlined in this Agreement, they will be liable for liquidated damages in the amount of [X] dollars for each day of non-performance. These damages are agreed upon in advance to cover potential losses resulting from such non-performance.
Non-performance clause with provision for termination upon non-performance
This version allows for termination.
If [Party B] fails to perform any material obligations within the time specified in this Agreement, [Party A] has the right to terminate the Agreement immediately without notice and seek compensation for all costs and damages incurred due to the non-performance.
Non-performance clause with provision for cure period
This version includes a cure period.
If either party fails to perform any obligation under this Agreement, the non-defaulting party may provide written notice specifying the default. The defaulting party will have [X] days from receipt of the notice to cure the non-performance before any penalties or termination provisions are triggered.
Non-performance clause with provision for performance bond
This version requires a performance bond.
In the event of non-performance, the defaulting party must forfeit the performance bond in the amount of [X] dollars, which will be used to compensate the non-defaulting party for damages resulting from the failure to perform.
Non-performance clause with provision for termination for cause
This version allows termination for cause.
If either party fails to perform its obligations under this Agreement and does not cure the non-performance within [X] days after receiving notice, the non-defaulting party may terminate the Agreement for cause and seek damages incurred due to the non-performance.
Non-performance clause with provision for remedy by specific performance
This version provides for specific performance as a remedy.
If [Party B] fails to perform as required by this Agreement, [Party A] may request specific performance to compel [Party B] to fulfill its obligations. If [Party B] refuses or fails to perform after such request, [Party A] may terminate the Agreement and seek other remedies.
Non-performance clause with provision for a step-by-step resolution process
This version includes a detailed resolution process.
In the event of non-performance, the Parties agree to resolve the issue in the following manner: (1) The non-performing party will be given written notice. (2) The non-performing party has [X] days to cure the default. (3) If the issue remains unresolved after the cure period, the parties may agree to a mediation or arbitration process. If the issue is still not resolved after mediation, the non-defaulting party may terminate the Agreement.
Non-performance clause with provision for non-refundable deposits in case of non-performance
This version applies to non-refundable deposits.
In the event of non-performance by either party, any non-refundable deposits made under this Agreement will not be returned. These deposits will be used to cover the non-defaulting party’s damages and expenses incurred as a result of non-performance.
Non-performance clause with provision for withholding payments
This version allows for withholding payments.
If [Party B] fails to perform its obligations under this Agreement, [Party A] may withhold any payments due to [Party B] until the default is remedied. Payments will resume once the non-performance has been cured.
Non-performance clause with provision for an agreed penalty for delay
This version includes an agreed penalty for delays.
If either party fails to perform by the agreed deadlines, the defaulting party will be liable for a penalty of [X] dollars for each day of delay. This penalty will apply until the obligations are fulfilled and the non-performance is cured.
Non-performance clause with provision for performance review
This version includes a performance review.
The Parties agree to review performance quarterly during the term of this Agreement. If any party is found to be in non-performance, the defaulting party will be notified and required to correct the issue within [X] days. If the issue persists, the non-defaulting party may terminate the Agreement.
Non-performance clause with provision for dispute resolution
This version includes dispute resolution in case of non-performance.
If a dispute arises regarding non-performance, the Parties agree to submit the matter to [mediation/arbitration] within [X] days of the notice of default. If the dispute is not resolved, the non-defaulting party may terminate the Agreement and pursue damages.
Non-performance clause with provision for non-performance due to force majeure
This version includes an exception for force majeure.
If either party fails to perform its obligations due to circumstances beyond its control (force majeure), the non-performing party must notify the other party in writing. No penalties or termination will be applied unless the delay exceeds [X] days.
Non-performance clause with provision for notification of non-performance
This version requires notification of non-performance.
If a party fails to perform its obligations under this Agreement, the non-performing party must provide written notice to the other party. If the default is not remedied within [X] days of the notice, the non-defaulting party may terminate the Agreement and seek appropriate remedies.
Non-performance clause with provision for alternative performance arrangements
This version allows for alternative performance arrangements.
In the event of non-performance, the Parties may mutually agree to alternative arrangements to fulfill the obligations of this Agreement. If the alternative arrangements do not resolve the issue, the Agreement may be terminated, and damages claimed.
Non-performance clause with provision for suspension of services
This version allows for suspension of services.
If either party fails to perform its obligations, [Party A] may suspend all services until the non-performance is remedied. No payments will be required during the suspension period, and the Agreement may be terminated if the default is not cured within [X] days.
Non-performance clause with provision for return of goods
This version applies to the return of goods in case of non-performance.
If goods are not delivered as agreed, [Party B] may return the goods and request a full refund. If the return is accepted, [Party A] will process the refund within [X] days. Non-performance due to this issue will not result in further penalties.
Non-performance clause with provision for remedy by replacement
This version includes remedy by replacement.
If the product or service does not meet the agreed standards, [Party B] is entitled to a replacement product or service. If the replacement is not provided within [X] days of the request, the agreement will be considered breached, and a refund will be issued.
Non-performance clause with provision for limitation of liability
This version limits liability for non-performance.
In the event of non-performance, the liability of the defaulting party shall be limited to the total amount paid under this Agreement, excluding any consequential or indirect damages, unless otherwise specified.
Non-performance clause with provision for non-performance notice period
This version applies a notice period for non-performance.
If either party fails to perform its obligations under this Agreement, the non-performing party will be given [X] days to remedy the failure after a notice of non-performance is sent. If the issue remains unresolved, the Agreement may be terminated, and damages sought.
Non-performance clause with provision for penalty fee upon failure
This version includes a penalty fee for failure to perform.
If [Party B] fails to meet its obligations under this Agreement, [Party B] will be required to pay a penalty fee of [X] dollars for each day of non-performance, starting from the date of default.
Non-performance clause with provision for remedy through third-party performance
This version allows third-party performance.
If [Party B] fails to perform any obligation under this Agreement, [Party A] may engage a third-party to perform the obligations on behalf of [Party B], at [Party B]'s cost. Any costs incurred will be deducted from any outstanding amounts owed by [Party B].
Non-performance clause with provision for suspension of payments
This version allows for suspension of payments.
If [Party B] fails to perform any material obligation under this Agreement, [Party A] reserves the right to suspend any payments due to [Party B] until the non-performance is cured. Payments will resume once the default is remedied.
Non-performance clause with provision for refund of prepaid amounts
This version applies to prepaid amounts.
If [Party A] fails to perform its obligations under this Agreement, [Party B] may request a refund of any prepaid amounts for the undelivered goods or unperformed services. The refund will be processed within [X] days of the refund request.
Non-performance clause with provision for automatic termination after default
This version includes automatic termination.
If [Party B] fails to perform any obligation under this Agreement and does not remedy the failure within [X] days after receiving written notice, this Agreement will terminate automatically, and all amounts owed will become due immediately.
Non-performance clause with provision for the right to terminate for non-payment
This version applies to non-payment.
If [Party B] fails to make any payment by the due date, [Party A] has the right to terminate this Agreement, with or without prior notice. [Party A] may seek all available remedies under the law for the non-payment.
Non-performance clause with provision for waiver of penalties
This version allows a waiver of penalties.
In the event of non-performance, [Party A] may waive any penalties or late fees at its discretion, provided the defaulting party remedies the failure to perform within [X] days and agrees to perform in accordance with the Agreement's terms going forward.
Non-performance clause with provision for alternative dispute resolution
This version includes alternative dispute resolution.
If a non-performance issue arises and the Parties are unable to resolve it through direct negotiation, they agree to submit the dispute to mediation or arbitration, as specified in this Agreement, before taking legal action.
Non-performance clause with provision for compensation for lost opportunities
This version compensates for lost opportunities.
If [Party A] fails to perform its obligations, causing [Party B] to miss a business opportunity, [Party A] will be liable for compensation equal to the value of the lost opportunity, as agreed upon by both Parties or determined by an independent third party.
Non-performance clause with provision for extended deadline in case of unforeseen delays
This version extends the deadline for unforeseen delays.
If non-performance is due to unforeseen circumstances, including but not limited to natural disasters or force majeure events, the deadline for performance will be extended for a period equal to the delay caused by such events.
Non-performance clause with provision for suspension of rights and privileges
This version suspends rights and privileges.
In the event of non-performance, [Party A] reserves the right to suspend any rights or privileges granted under this Agreement until the default is cured. Any suspended rights will be reinstated once the non-performance is addressed.
Non-performance clause with provision for direct performance by non-defaulting party
This version allows direct performance by the non-defaulting party.
If [Party B] fails to perform any material obligation under this Agreement, [Party A] has the right to perform the obligation itself or through a third party, with any associated costs to be borne by [Party B].
Non-performance clause with provision for adjustment of fees after non-performance
This version adjusts fees after non-performance.
If there is a delay or non-performance, [Party A] may adjust the fees payable under this Agreement. Any adjusted fees will be determined based on the extent of the non-performance and will be communicated in writing to [Party B].
Non-performance clause with provision for refund on goods not delivered
This version applies to undelivered goods.
If the goods are not delivered by the agreed-upon date, [Party B] is entitled to a refund of the full purchase price for the undelivered goods. The refund will be processed within [X] days of the non-delivery.
Non-performance clause with provision for payment of interest on overdue amounts
This version applies interest to overdue amounts.
In the event of non-performance resulting in overdue payments, interest will accrue at a rate of [X]% per annum on the overdue amounts, starting from the due date until the payment is made in full.
Non-performance clause with provision for remedy through re-performance
This version requires re-performance of services.
If [Party B] fails to perform any part of the services as outlined in this Agreement, [Party A] may require [Party B] to re-perform the services at no additional cost. The re-performance must be completed within [X] days.
Non-performance clause with provision for compensation of legal fees
This version compensates legal fees.
In the event of non-performance, the defaulting party agrees to compensate the non-defaulting party for all reasonable legal fees and costs incurred in enforcing the terms of this Agreement, including but not limited to attorneys’ fees, court costs, and arbitration fees.
Non-performance clause with provision for pre-agreed damages for non-performance
This version sets pre-agreed damages.
If [Party B] fails to perform as agreed, the Parties agree to a pre-determined amount of liquidated damages in the amount of [X] dollars per day of non-performance, up to a maximum of [Y] dollars.
Non-performance clause with provision for partial performance adjustment
This version applies when only partial performance occurs.
If [Party B] performs only part of its obligations under this Agreement, [Party A] may adjust the fees or payments accordingly, paying only for the portion of the services or goods that have been satisfactorily completed.
Non-performance clause with provision for written notice of breach
This version requires written notice.
In case of non-performance, the non-breaching party must send a written notice to the defaulting party, specifying the breach and allowing [X] days for the defaulting party to remedy the failure. If not remedied, the Agreement may be terminated.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.