Contract Glossary
Termination
Definition
Termination is ending a contract before it naturally expires. You can terminate 'for cause' (the other party screwed up) or 'for convenience' (you just want out). The clause spells out who can terminate, when, how much notice is required, and what happens next.
In Practice
Your SaaS vendor's service quality drops. Outages, slow support, missed SLAs. Your contract has two termination options: for cause (30-day cure period — they get 30 days to fix the problems after written notice) and for convenience (90-day notice, no reason needed). If the problems are bad enough, terminate for cause to avoid paying during the 90-day convenience window. But document everything — if the vendor disputes whether the problems constitute 'cause,' you'll need evidence.
Example Clause
Either Party may terminate this Agreement upon thirty (30) days' prior written notice to the other Party. Either Party may terminate this Agreement immediately upon written notice if the other Party materially breaches this Agreement and fails to cure such breach within fifteen (15) days after receiving written notice thereof. Upon termination, all obligations that by their nature should survive shall remain in effect.
Common in these contract types
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Frequently asked questions about termination
For cause requires a specific reason — the other party breached the contract, went bankrupt, or violated a law. For convenience means either party can walk away with proper notice, no reason needed. For-convenience termination gives you flexibility; for-cause termination gives you protection. Good contracts include both.
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Create your contractThis content is for informational purposes only and does not constitute legal advice. For contracts with significant financial or legal implications, review by a qualified attorney is recommended.