Overview

The Termination clause details the circumstances under which the parties may end their legal relationship and discontinue their obligations under the agreement. Under common law, the parties may terminate the agreement for material or fundamental breach of the agreement.

Our standard agreement allows the parties to terminate by mutual consent, on breach or failure of a condition precedent, if one party becomes bankrupt, or if there is a law or order prohibiting the agreement.

Our variants are build using simple and easily-interchangeable modules so that the parties can choose a pre-built variant that fits their needs, or select which modules they desire and insert the modules into the parties' own clause.

The clause may expand or limit the common law right to terminate and may contain the following termination events, which may be mutual or unilateral, and optionally include a right to cure.

(a) termination on notice

(b) termination on breach

(c) termination on insolvency

(d) termination on a change of control

(e) termination on an event (such as a superseding agreement)

You may want to include a Termination Fee provision to your Termination Clause, so that if a party terminates the agreement for certain reasons that party will be required to pay a termination fee to the other party. See the Standard Clause + Termination Fee variant of our Expenses clause, which you can tailor to cover the reasons for termination that work for your agreement.

See our discussion below for more information on the right to cure, change of control provisions, and material v. immaterial breach.