Contract Glossary
Termination for Cause
Definition
A contract provision that lets one party end the agreement when the other party has materially breached its obligations — missed payments, failed deliverables, violated confidentiality, or otherwise failed to perform. Unlike termination for convenience, termination for cause requires a specific, documented reason. Most for-cause clauses include a 'cure period' — a window (typically 15–30 days) for the breaching party to fix the problem before termination takes effect.
In Practice
You hired a marketing agency on a 12-month contract at $8,000/month. Three months in, they miss two consecutive campaign deadlines and deliver work that doesn't match the agreed scope. You send a written notice citing 'material breach' — specifically, failure to deliver the agreed-upon services per Section 4.2 of the contract. The cure period is 15 days. The agency doesn't fix the issues within 15 days, so you terminate for cause. Because it's a for-cause termination, you don't owe a termination fee, and you may have a claim for damages from the failed campaigns. Without a for-cause clause, you'd be stuck arguing breach in court before you could safely stop paying.
Example Clause
Either Party may terminate this Agreement for cause upon written notice if the other Party materially breaches any provision of this Agreement and fails to cure such breach within fifteen (15) days after receiving written notice specifying the nature of the breach. In the event of termination for cause, the breaching Party shall be liable for all damages resulting from such breach, and the non-breaching Party shall have no further payment obligations except for amounts due for services satisfactorily performed prior to the date of termination.
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Frequently asked questions about termination for cause
It's a provision that lets you end a contract when the other party has materially breached — failed to perform, missed payments, violated terms, or otherwise didn't hold up their end of the deal. It requires a specific, documented reason (the 'cause') and usually includes a cure period to give the breaching party a chance to fix the problem before termination is final.
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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.