How to Use a “Sunrise Clause” to Your Advantage

To understand how to use a sunrise clause to your advantage you must first understand what the clause actually is. In the context of a medical contract, a “sunrise clause” typically refers to a provision that outlines the terms and conditions under which a contract will come into effect or become operational. It sets a specific date or condition upon which the contract’s provisions will be activated.

The term “sunrise clause” is often used in contracts related to medical services, such as physician agreements, hospital contracts, or research collaborations. It ensures that the contractual obligations, rights, and responsibilities of the parties involved will not take effect until a particular event or date occurs. These clauses are in the majority of physician contracts.

For example, let’s say a hospital is entering into a contract with a group of physicians to provide specialized services. The contract may include a sunrise clause stating that the agreement will only become effective once the physicians have obtained all necessary licenses, credentials, and hospital privileges. Until that condition is met, the contract will not be operational, and the parties will not be bound by its terms.

A good way to use a sunrise clause to your advantage is with regards to your non-compete agreement. For example, requesting a grace period for the non-compete you sign to begin after three months of employment rather than on your first day of employment. This gives you the employee a reasonable amount of time to make sure the job is going to be a good fit before being tied down by a non-compete. This grace period can make contracts more equitable to both parties.

The purpose of a sunrise clause is to safeguard the interests of all parties involved and prevent them from being legally bound by a contract before certain critical requirements are fulfilled. It allows for a grace period during which necessary preparations can be made, ensuring that all parties are fully ready to comply with the terms of the contract before it takes effect.