A contractual provision that restricts a party from making negative statements about another party. These clauses are frequently found in settlement agreements, employment contracts, and severance packages. For instance, an employee receiving severance pay may agree not to make any defamatory or disparaging comments about the company or its leadership, either publicly or privately. Similarly, in a business sale, the seller might agree to refrain from speaking ill of the purchased company to protect its reputation and goodwill.
Such provisions serve to protect reputations and prevent potential damage resulting from negative publicity or commentary. They offer a degree of certainty and predictability, allowing parties to avoid protracted disputes or the erosion of business value. Historically, these clauses were often implicitly understood in business dealings, but their explicit inclusion in contracts has become increasingly common as a safeguard against reputational risk in the modern digital landscape.
