Legal Definitions - independent covenant

An independent covenant refers to a promise or obligation within a contract that stands alone, meaning its performance is not conditional upon the performance of another specific promise by the other party in the same contract.

In simpler terms, if a contract contains independent covenants, one party's failure to fulfill their promise does not automatically excuse the other party from fulfilling their separate, independent promise. The parties are still bound by their respective independent obligations, even if the other party has breached theirs. The non-breaching party would typically have a separate legal claim for the breach of the independent covenant, rather than being relieved of their own duties.

Here are some examples to illustrate this concept:

• Commercial Lease Agreement: Imagine a commercial lease where a tenant promises to pay monthly rent, and the landlord separately promises to provide a designated parking space for the tenant's exclusive use. If these are structured as independent covenants, the tenant's obligation to pay rent is not excused even if the landlord fails to provide the designated parking space. The tenant must still pay rent, but they would have a separate claim against the landlord for breaching the parking space covenant.

  How it illustrates the term: The tenant's duty to pay rent is "independent" of the landlord's duty to provide parking. One party's failure does not automatically relieve the other party of their distinct obligation.

• Software Development Contract: Consider a contract where a software company promises to deliver a specific software module by a certain date, and the client separately promises to provide all necessary user interface design specifications by an earlier date. If these are independent covenants, the software company is still obligated to deliver the module by the agreed-upon date, even if the client fails to provide the design specifications on time. The software company might have a claim for damages due to the client's delay, but their own delivery obligation remains.

  How it illustrates the term: The software company's promise to deliver the module is "independent" of the client's promise to provide design specifications. The client's breach does not automatically excuse the software company's performance.

• Business Partnership Agreement: In a partnership agreement, one partner might covenant to contribute a specific amount of capital to the business, while another partner covenants to manage the daily operations. If these are independent covenants, the partner who promised capital is still obligated to contribute the funds, even if the managing partner fails to perform their operational duties effectively. The partner contributing capital would have a claim for breach of the management covenant, but their own financial obligation stands.

  How it illustrates the term: The capital contribution obligation is "independent" of the operational management obligation. Each partner's duty is separate and not conditional on the other's performance in this specific context.