Even at the beginning of a contract, you should be thinking about the end of it. Think of the end of the
“relationship”, the exit strategy.
Termination must be properly negotiated.
Termination for Convenience: It is not working out, so in ‘x’ number of days the contract will be
terminated. (Same day is categorized as: xxx)
Why shouldn’t this be used?
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There may still be money or services owed by the business trying to get out of the contract.
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Value for your business is in the long-term. Setting up for success in the future, you will want to
lock in with the other business.
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Return on investment is contingent on the longevity of the relationship.
Unilateral Termination for Convenience: One party has the right to leave at any time, whereas the other
party does not.
When would it be favorable?
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Allows for more bargaining power and a wider variety of options.
In exchange for unilateral, a party may ask the other for something in return such as exclusivity.
Termination for Cause: There has been a breach of contract in one of the areas, such as not receiving a
product after providing them with money if that is in the agreement.
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Representations and Warranties: Set out mutual expectations of the party as to what is going on
and give factual information to the other party about your business.
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Inconvenient.