Modern Counsel for Growing Companies
In plain English
The ending of a contractual relationship under a contractual right, mutual agreement, or applicable law. It generally stops specified future performance but may leave accrued payments, claims, and surviving obligations in place. Termination is different from rescission, which seeks to unwind the transaction.
Types and key distinctions
Termination for Cause
Ending an agreement because a defined breach, misconduct, or other qualifying event has occurred. The meaning of cause depends on the contract and context. Notice, cure, decision procedures, and supporting evidence may be required before the right is exercised.
Termination for Convenience
A contractual right to end an agreement without proving the other party breached it. It may require advance notice, payment, completion of committed work, or other conditions. The right exists only to the extent the agreement or applicable law provides it and does not necessarily cancel accrued obligations.
Survival Clause
A provision specifying obligations intended to continue after an agreement ends, such as confidentiality, payment, IP, indemnity, or dispute procedures. Some obligations may also survive under their nature or applicable law. The clause should clarify duration and scope rather than assume termination erases every remaining responsibility.