Termination Clause (Commercial Contract)

Summary

These termination clauses may be used to terminate a commercial contract, and include termination for breach of contract, bankruptcy, convenience, change of control, and termination subject to designated limitations and obligations. It sets forth each party's respective right to terminate the agreement. These clauses include practical guidance and drafting notes. It is always preferable to include an express termination clause because, without one, it may not be clear whether the particular breach entitles the innocent party to rescind the agreement. A termination clause also allows the parties to tailor the termination provisions to their particular transaction and can provide a clear mechanism to follow if a termination right is triggered. Termination clauses typically deal with some or all of the following: (1) automatic termination or expiry at the end of a fixed term; (2) allowing either party to terminate the contract at any time on notice (sometimes known as termination for ...