Clause guide
Records Retention Clause clause: meaning, risks, and what to negotiate
Requires certain records to be kept for a defined period and sometimes made available for review.
What it means
Retention obligations can affect compliance, audit readiness, and legal exposure. Keeping records too briefly or too long can both create problems.
Common risks
- • Retention periods may be too long and create extra cost.
- • Important records may be deleted too early.
- • The clause may interact badly with privacy deletion obligations.
What to check before signing
- • What records must be retained?
- • For how long must they be kept?
- • Does the clause account for privacy or legal deletion requirements?
Negotiation ideas
- • Limit retention to necessary categories of records.
- • Use commercially reasonable retention periods.
- • Carve out deletion obligations required by law or privacy rules.
Example clause
“Each party shall retain records reasonably necessary to demonstrate compliance with this Agreement for a period of three (3) years after expiration or termination.”
Frequently asked questions
Why does a records retention clause matter?
It controls how long supporting records must be kept and can affect audits, disputes, and compliance.
Related clauses
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