Obligations Upon Termination Clauses

Summary

This obligations upon termination clause lists the parties' obligations when the underlying agreement is terminated, such as the destruction of confidential information, return of property, cleanup, payment of fees, and cooperation in transfer of services. This template includes practical guidance and drafting notes. Including an obligations upon termination clause is important as it lets both parties know what will happen, or what their obligations will be, upon termination. As a result, it can have the ability to discourage a termination or failed performance as a party may not want to have comply with unfavorable, remaining obligations if they terminate; they may instead decide to work to finish the agreement. For more on terminations, see Notice of Termination, Notice of Termination for Cause, and Notice of Termination for Convenience.