This clause governs how a buyer may accept partial deliveries in a contract that includes restrictive covenants (such as non-compete, non-solicitation, or confidentiality obligations). Restrictive covenants are promises that limit a party's future conduct—for example, a seller agreeing not to compete with the buyer's business for a set period. The "partial delivery acceptance" clause addresses a practical problem: if a seller is obligated to deliver goods, services, or assets in stages, and the buyer accepts some deliveries while rejecting others, does the buyer's acceptance of partial performance waive or modify the seller's restrictive covenant obligations? This clause clarifies that accepting partial delivery does not waive the seller's ongoing covenant obligations, ensuring the buyer retains full protection even if the transaction is incomplete or disputed.
This matters because restrictive covenants are often the most valuable part of a transaction (especially in business sales), and buyers need assurance that partial acceptance of goods or services won't inadvertently release the seller from their non-compete or confidentiality duties. Without this clause, a seller might argue: "You accepted my partial delivery, so you've accepted the deal as-is, which means my restrictive covenants no longer apply." The clause prevents this argument by explicitly severing the acceptance of deliverables from the enforceability of covenants.
If you are a buyer, ensure this clause explicitly states that acceptance of partial delivery (or rejection of any delivery) does not waive, modify, or release any restrictive covenants, non-compete obligations, confidentiality duties, or indemnification provisions. Add language such as: "Buyer's acceptance of partial delivery shall not constitute a waiver of any restrictive covenant or other obligation owed by Seller under this Agreement." If you are a seller, negotiate for language that limits the duration or scope of covenants if you are unable to complete deliveries due to the buyer's actions, but do not agree to language that allows the buyer to accept partial performance and then selectively enforce covenants. Consider adding a termination clause that specifies what happens to covenants if the transaction is abandoned or materially breached.
Frequently Asked Questions
What does this clause mean in simple terms?
This clause governs how a buyer may accept partial deliveries in a contract that includes restrictive covenants (such as non-compete, non-solicitation, or confidentiality obligations).
Why should I care about this clause?
Restrictive covenants are promises that limit a party's future conduct—for example, a seller agreeing not to compete with the buyer's business for a set period.
What are my options?
The "partial delivery acceptance" clause addresses a practical problem: if a seller is obligated to deliver goods, services, or assets in stages, and the buyer accepts some deliveries while rejecting others, does the buyer's acceptance of partial performance waive or modify the seller's restrictive covenant obligations?
How does this affect small businesses?
This clause clarifies that accepting partial delivery does not waive the seller's ongoing covenant obligations, ensuring the buyer retains full protection even if the transaction is incomplete or disputed.