Term and Termination Clause

Summary

This term and termination clause template may be used in a commercial contract to set forth the length of time the contract will be in effect before it expires and the circumstances pursuant to which the contract can be terminated before its expiration by the parties. This template includes practical guidance, drafting notes, and alternate clauses. This clause specifies a duration of time for the agreement and allows for termination of the agreement, with or without cause. Since not all breaches are so plainly material, and to obviate the uncertainty over whether a breach is material, thereby entitling the non-breaching party to terminate the contract, it is prudent to include a termination clause in the agreement. A termination clause may spell out specific acts or omissions that warrant termination, or it may simply make any uncured breach a cause of termination. For a full listing of related contract clauses, see General Commercial Contract Clause Resource Kit. For more information regarding termination rights, see Termination and Cancellation Rights. For non-jurisdictional term clauses or general termination clauses (including termination for change of control, at-will, etc.), see Term Clauses and Termination Clauses, respectively. For a termination on bankruptcy clause, see Ipso Facto Clause.