Contract Retention: How Long and How?
Contract Retention: How Long and How?
"We've cleared out the archive and thrown away the old contracts." The sentence makes any compliance officer shudder. Because when are you actually allowed to delete a contract? And what happens if you delete too early?
Contract retention isn't just about tidiness – it's about legal protection and the ability to document your agreements when it really matters.
Why Retention Periods Matter
A contract is your proof of what was agreed. If a dispute arises in three, five, or ten years, you need to be able to present the documentation. Without the contract, you have no evidence – and often no way to enforce your rights.
The Key Retention Periods
1. Accounting Materials: 5 Years
The Bookkeeping Act requires that accounting materials be retained for at least 5 years from the end of the financial year to which the material relates.
2. Employment Contracts: 5 Years After Termination
Employment law claims can be raised up to 5 years after the employment relationship ends. Therefore, retain employment contracts and severance agreements for a minimum of 5 years after the employee has left.
3. Tax-Related Documents: 5-10 Years
Tax authorities can in certain cases go back up to 10 years. Contracts with tax relevance should be retained for a corresponding period.
4. Property-Related Contracts: Minimum 10 Years
Deeds, lease agreements, and easements should be retained for the entire ownership period plus at least 10 years.
5. International Contracts: Up to 30 Years
Contracts with foreign parties may be subject to other countries' limitation rules with periods of up to 30 years.
What Happens If You Delete Too Early?
The consequences can be serious. In a dispute, you lack proof of the agreement's content. During audits, you cannot document compliance. During tax reviews, you risk estimated assessments.
Rule of thumb: When in doubt, retain. The risk of keeping too long is minimal compared to deleting too early.
Physical vs. Digital Storage
Paper contracts take up space, require secure storage, and are vulnerable to fire and water damage. Digital contracts take up no space, are searchable in seconds, can be backed up automatically, and are often more secure than a locked filing cabinet.
For digital storage to be valid, document integrity must be ensured, readability preserved throughout the retention period, and backup must protect against data loss.
How to Organise Your Digital Archive
Use consistent naming like "2025-03_CustomerName_ContractType.pdf". Organise by contract type, year, or customer – and stick to it. Add metadata such as expiry date and contract value. And set up automated reminders for contracts that expire or need renegotiation.
How ePact Helps with Retention
With ePact, retention challenges are solved automatically. All signed documents are stored securely in the cloud with 256-bit AES encryption. Each contract has a complete audit trail documenting when it was created, sent, and signed. You can search across all documents, and automatic backup ensures you never lose a document.
You don't need to think about retention periods – your contracts remain secure until you actively choose to delete them.
Remember: A contract you can't find is just as worthless as a contract you never made.
