Termination clause
The part of a contract setting out how either side can end the engagement - notice period, final payments and what happens to work in progress.
For example, a retainer's termination clause requires 30 days' notice and payment for all work done up to the end date. Either side can walk, but the exit is orderly and the agency is paid for what it delivered.
Why it matters to agencies: a clear termination clause makes the end of an engagement orderly instead of a dispute, protecting both revenue and relationship. Notice periods give an agency time to backfill the lost capacity, and agreed final-payment terms prevent walking away unpaid.
What a termination clause covers
- Notice period required
- Grounds for termination (for cause or for convenience)
- Payment for work completed
- Handover of work and access
- What survives termination (IP, confidentiality)
- No notice period, so either side can vanish overnight.
- Not addressing payment for work done at termination.
- No clarity on IP and access on exit.
What is a termination clause?
The part of a contract setting out how either side can end the engagement - notice period, final payments and what happens to work in progress.
What should a termination clause include?
The notice period, how either party can end the contract, payment for work completed, and what happens to deliverables and work in progress.
What is a typical notice period for a retainer?
Commonly 30 days, sometimes 60 or 90 for larger engagements - enough time to backfill the lost capacity.
How does a termination clause differ from a kill fee?
A termination clause governs how an engagement ends in general; a kill fee specifically compensates the agency when a booked project is cancelled.