Termination clause
The contract section that explains how either side can end the job, how much notice is required, and what still gets paid.
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What it is
A termination clause says who may end the engagement, for what reason, with how much notice, and what happens next. Termination for convenience allows an exit without proving a breach. The phrase comes from US federal procurement, where agencies reserved the right to cancel a fixed-price contract because priorities changed, not because the supplier failed, and then paid for the work already done. Termination for cause covers a defined failure, often with a period to cure it before the contract ends.
Reach for the clause in every service agreement and MSA, then make it operational: name the notice method, payment owed for work completed and committed costs, handoff duties, treatment of deposits, and the clauses that survive, such as confidentiality and unpaid fees. A stop-work clause handles a pause; termination handles the actual end.
Gotcha: 'either party may terminate at any time' leaves the expensive part unanswered. If the client cancels halfway through a reserved month, the contract must say whether scheduled fees, a kill fee, or only accepted work is payable. The notice period and payment formula need to agree.
Ask AI for it
Draft a balanced termination clause for the service agreement below. Separate termination for convenience from termination for cause, give cause breaches a 10-business-day cure period, specify written notice and its effective date, and state what is owed for completed work, approved expenses, non-cancellable commitments, and any kill fee. Add handoff and data-return duties, treatment of prepaid amounts, and a survival list for confidentiality, IP, liability limits, dispute terms, and unpaid fees. Flag choices that depend on the deal instead of silently choosing them.