Effect of termination clause: Copy, customize, and use instantly
Introduction
An effect of termination clause explains what happens when a contract ends. It sets out the rights and responsibilities of the parties after termination, ensuring clarity and avoiding disputes.
Below are effect of termination clause templates tailored to different situations. Copy the one you need, customize it, and add it to your contract.
Standard effect of termination clause
This clause provides a general overview of obligations upon termination.
Upon termination of this agreement, each party shall promptly return or destroy all confidential information of the other party, and any outstanding payments or obligations incurred prior to termination shall remain due and enforceable.
Continuing obligations clause
This clause ensures that specific obligations survive termination.
Termination of this agreement does not relieve either party of its obligations under [specific sections, e.g., confidentiality, indemnification, or dispute resolution], which shall survive termination.
Return of property clause
This clause emphasizes the return of materials and equipment.
Upon termination of this agreement, each party shall return all property, materials, and documentation belonging to the other party within [specific timeframe]. Failure to comply will result in additional liabilities as specified herein.
Payment settlement clause
This clause focuses on settling outstanding payments.
Termination of this agreement shall not affect the obligation of either party to settle any outstanding payments due under this agreement. All amounts owed must be paid within [specific timeframe] following termination.
Transition assistance clause
This clause includes obligations to assist during a transition period after termination.
Following termination of this agreement, the parties agree to cooperate in good faith to ensure a smooth transition, including providing reasonable assistance for a period of [specific timeframe] to minimize disruptions.
Intellectual property post-termination clause
This clause specifies how intellectual property is handled after termination.
Upon termination of this agreement, each party shall cease all use of the other party’s intellectual property, except as expressly permitted under [specific section]. Any licenses granted herein shall automatically terminate unless otherwise specified.
Refund and reimbursement clause
This clause outlines refund or reimbursement obligations.
In the event of termination, any advance payments for services not rendered shall be refunded within [specific timeframe]. Similarly, any expenses incurred by either party on behalf of the other party shall be reimbursed as agreed upon.
Early termination effect clause
This clause describes specific consequences of early termination.
If this agreement is terminated prior to the expiration of its term, [specific party] shall compensate [other party] for all costs incurred up to the termination date, including any early termination fees as outlined in [specific section].
Data retention and deletion clause
This clause addresses the handling of data upon termination.
Upon termination of this agreement, each party shall return or permanently delete all data belonging to the other party, unless retention is required by law. Written confirmation of deletion must be provided within [specific timeframe].
Non-compete post-termination clause
This clause enforces a non-compete obligation after termination.
Following termination of this agreement, [specific party] agrees not to engage in any activities that directly compete with [other party] for a period of [specific timeframe], as outlined in [specific section].
Customer handover clause
This clause ensures the proper handover of customers or accounts.
Upon termination of this agreement, [specific party] agrees to provide a complete handover of all customer accounts, including relevant documentation, to [other party] within [specific timeframe].
Force majeure-related termination clause
This clause specifies actions required after a force majeure event leads to termination.
If this agreement is terminated due to a force majeure event, both parties agree to return any advance payments for services not rendered and settle all outstanding obligations within [specific timeframe].
Liquidated damages clause
This clause specifies damages payable upon termination.
In the event of termination, the terminating party agrees to pay liquidated damages in the amount of [specific dollar amount or formula], as outlined in [specific section], to compensate for losses incurred by the other party.
Exit interview clause
This clause mandates a review of the termination’s circumstances.
Upon termination of this agreement, the parties agree to conduct a mutual review of the circumstances leading to termination. Findings from this review will be documented and used to finalize any outstanding obligations.
Dispute resolution post-termination clause
This clause enforces dispute resolution mechanisms even after termination.
Termination of this agreement shall not affect the parties’ obligations to resolve disputes under [specific section]. All unresolved disputes shall be addressed according to the dispute resolution terms of this agreement.
Limited liability post-termination clause
This clause limits liabilities after termination.
Upon termination of this agreement, neither party shall be liable for any indirect or consequential damages arising from the termination, except as provided under [specific section].
Termination impact on affiliates clause
This clause clarifies the effect of termination on affiliated entities.
Termination of this agreement shall apply solely to the parties named herein and shall not automatically terminate any agreements between the parties’ affiliates unless expressly stated.
Partial termination clause
This clause permits partial termination of specific obligations.
The parties agree that termination of this agreement may be limited to specific obligations or provisions, as mutually agreed upon in writing, without affecting the validity of the remaining terms.
Public announcements clause
This clause governs communications about termination.
Upon termination of this agreement, neither party shall make public announcements or disclosures regarding the termination without prior written consent of the other party, except as required by law.
Inventory return clause
This clause addresses the return of inventory upon termination.
Upon termination of this agreement, [specific party] agrees to return or dispose of all inventory supplied under this agreement in accordance with the instructions of [other party].
Future obligations exclusion clause
This clause excludes obligations beyond the termination date.
Termination of this agreement relieves both parties of any obligations or liabilities that would otherwise arise after the effective termination date, unless explicitly stated in [specific section].
Transition team clause
This clause establishes a team to manage post-termination transitions.
Upon termination of this agreement, each party shall designate a transition team responsible for managing the handover of operations, documentation, and other relevant matters to ensure minimal disruption.
Intellectual property escrow clause
This clause involves the release of intellectual property held in escrow.
Upon termination of this agreement, all intellectual property held in escrow under [specific section] shall be released to [specific party], subject to the terms of the escrow agreement.
Equipment retrieval clause
This clause specifies the handling of physical assets upon termination.
Upon termination of this agreement, [specific party] shall retrieve all equipment provided under this agreement from the other party’s premises within [specific timeframe]. Failure to do so will result in storage fees as outlined in [specific section].
Service continuity clause
This clause requires temporary continuation of services after termination.
Following termination of this agreement, [specific party] agrees to continue providing essential services for a period of [specific timeframe] to avoid disruption, as specified in [specific section].
Regulatory compliance clause
This clause addresses compliance obligations post-termination.
Termination of this agreement shall not relieve either party of its obligations to comply with applicable regulations related to the performance of this agreement, as outlined in [specific section].
Employee reassignment clause
This clause ensures proper handling of employees impacted by termination.
Upon termination of this agreement, [specific party] agrees to reassign employees involved in the performance of this agreement to minimize disruption and comply with employment regulations.
Contractual liabilities release clause
This clause releases the parties from certain liabilities after termination.
Upon termination of this agreement, each party releases the other from any contractual liabilities arising after the termination date, except for obligations that explicitly survive under [specific section].
Residual obligations clause
This clause clarifies remaining obligations post-termination.
Termination of this agreement does not affect any obligations that are intended to continue after termination, including but not limited to [specific obligations, e.g., confidentiality, payment of accrued fees, or indemnification].
Reconciliation clause
This clause mandates a final review of accounts or performance.
Upon termination of this agreement, both parties shall reconcile all accounts, deliverables, and outstanding obligations within [specific timeframe] to ensure closure of all pending matters.
Knowledge transfer clause
This clause requires the transfer of knowledge or materials upon termination.
Upon termination of this agreement, [specific party] agrees to provide all documentation, training, and relevant knowledge necessary for the other party to continue operations independently, as specified in [specific section].
Post-termination indemnity clause
This clause imposes indemnification obligations after termination.
Termination of this agreement does not relieve either party of its obligations to indemnify the other for claims arising out of acts or omissions that occurred during the term of the agreement.
Marketing materials clause
This clause specifies the handling of marketing collateral.
Upon termination of this agreement, [specific party] shall immediately cease using any marketing materials, trademarks, or logos belonging to [other party] and return or destroy such materials as instructed.
Custom deliverables clause
This clause governs the disposition of custom work upon termination.
Upon termination of this agreement, ownership of all custom deliverables created under this agreement shall be transferred to [specific party] in accordance with the terms outlined in [specific section].
Interim reporting clause
This clause requires interim reports before final termination takes effect.
Prior to the effective date of termination, [specific party] shall submit an interim report summarizing all completed tasks, pending deliverables, and outstanding obligations.
Operational freeze clause
This clause stops specific activities upon termination.
Upon termination of this agreement, all operational activities related to [specific services or obligations] shall immediately cease unless otherwise agreed upon in writing by the parties.
Audit rights post-termination clause
This clause allows audits to confirm compliance after termination.
Following termination of this agreement, [specific party] retains the right to audit the other party’s compliance with obligations surviving termination, including but not limited to confidentiality and intellectual property provisions.
Force majeure resolution clause
This clause addresses how obligations are resolved after a force majeure-related termination.
If termination occurs due to a force majeure event, both parties agree to resolve outstanding obligations equitably, taking into account the impact of the force majeure event on performance.
Legal action preservation clause
This clause preserves rights to pursue legal action after termination.
Termination of this agreement does not prevent either party from pursuing legal action for breaches that occurred prior to termination or for obligations that survive termination.
Partial service delivery clause
This clause governs the handling of incomplete services upon termination.
If this agreement is terminated prior to full performance, [specific party] shall deliver all partially completed work to [other party], who may use it as permitted under the terms of this agreement.
Communication plan clause
This clause mandates a clear plan for communicating termination.
Upon termination of this agreement, the parties agree to develop and execute a joint communication plan to notify affected stakeholders, ensuring clarity and minimizing confusion.
Licensing termination clause
This clause specifies the treatment of licensing agreements upon termination.
Upon termination of this agreement, all licenses granted under this agreement shall immediately terminate, and [specific party] shall cease all use of licensed materials, returning or destroying such materials as required.
Final settlement clause
This clause mandates a final financial and operational settlement.
Upon termination of this agreement, the parties shall settle all financial obligations and outstanding deliverables within [specific timeframe] to ensure a complete resolution of contractual matters.
Pending orders clause
This clause addresses how to handle unfulfilled orders or services upon termination.
If this agreement is terminated with pending orders or unfulfilled services, [specific party] may complete or cancel such orders at its discretion, subject to the terms outlined in [specific section].
Confidential data handling clause
This clause governs the treatment of confidential information upon termination.
Upon termination of this agreement, all confidential information exchanged during the term of this agreement must be returned or destroyed, unless otherwise required to be retained by law or as agreed in [specific section].
Termination notice compliance clause
This clause enforces adherence to notice procedures for termination.
Termination of this agreement shall only be effective if executed in accordance with the termination notice requirements set forth in [specific section], including specified timeframes and methods of communication.
Software deactivation clause
This clause governs access to software or platforms after termination.
Upon termination of this agreement, [specific party] shall deactivate all user accounts and revoke access to any software, tools, or platforms provided under this agreement within [specific timeframe].
Non-solicitation extension clause
This clause extends non-solicitation obligations beyond termination.
Termination of this agreement does not relieve either party of its obligations under the non-solicitation provisions, which shall remain in effect for a period of [specific duration] following termination.
Shared costs settlement clause
This clause determines how shared expenses are handled upon termination.
Upon termination of this agreement, the parties agree to reconcile and settle all shared costs incurred up to the effective termination date, as detailed in [specific section].
Warranty disclaimer clause
This clause excludes warranties post-termination.
Termination of this agreement immediately voids any warranties or guarantees provided under this agreement, except for those explicitly stated to survive termination in [specific section].
Termination for insolvency clause
This clause addresses termination due to insolvency.
In the event of termination due to the insolvency or bankruptcy of either party, the terminating party retains all rights to pursue remedies for outstanding obligations under this agreement.
Restricted use clause
This clause limits the use of materials provided under the agreement after termination.
Upon termination of this agreement, [specific party] agrees not to use any materials, documents, or data provided under this agreement for any purposes outside of those explicitly permitted prior to termination.
Employee handover clause
This clause governs employee transfers or handovers upon termination.
Upon termination of this agreement, [specific party] agrees to facilitate the transfer or reassignment of employees directly involved in the performance of this agreement to ensure operational continuity and compliance with employment laws.
Legal jurisdiction preservation clause
This clause ensures jurisdictional rules continue to apply post-termination.
Termination of this agreement does not affect the jurisdictional provisions, which shall govern the resolution of disputes or obligations surviving termination as outlined in [specific section].
Performance reviews clause
This clause requires a review of contract performance upon termination.
Upon termination of this agreement, the parties agree to conduct a joint review of performance under the agreement, documenting areas of success and failure for reference in future agreements or discussions.
Third-party obligations clause
This clause clarifies responsibilities for third parties engaged under the agreement.
Upon termination of this agreement, any obligations undertaken by third parties on behalf of the parties must be completed or transferred as mutually agreed, ensuring no disruption to ongoing operations.
Reimbursement for termination-related costs clause
This clause specifies reimbursement for costs incurred due to termination.
If termination results in additional costs, including administrative or legal fees, the parties agree that such costs will be borne by the terminating party unless termination is due to a breach.
Regulatory reporting clause
This clause addresses compliance with regulatory obligations post-termination.
Upon termination of this agreement, the parties agree to cooperate in fulfilling any regulatory reporting obligations arising from activities performed under this agreement.
Intellectual property disposition clause
This clause governs the handling of intellectual property created under the agreement.
Upon termination of this agreement, all intellectual property rights created during the term of the agreement shall be retained by [specific party] or disposed of as outlined in [specific section].
Inventory liquidation clause
This clause applies to contracts involving inventory or goods.
Upon termination of this agreement, any remaining inventory or goods provided under this agreement shall be returned, sold, or otherwise disposed of as mutually agreed by the parties.
Transition plan clause
This clause requires a detailed transition plan upon termination.
If termination occurs, the parties agree to implement a transition plan within [specific timeframe] to ensure minimal disruption to ongoing projects or operations.
Partnership dissolution clause
This clause addresses the unwinding of partnerships.
Upon termination of this agreement, the partnership established under this agreement shall be dissolved, with assets and liabilities distributed as outlined in [specific section].
Customer notification clause
This clause mandates informing customers affected by the termination.
Upon termination of this agreement, [specific party] agrees to notify all affected customers within [specific timeframe] and provide reasonable support during the transition period.
Escrow release clause
This clause governs the release of funds held in escrow upon termination.
Upon termination of this agreement, any funds held in escrow related to this agreement shall be released in accordance with the terms outlined in [specific escrow agreement].
Force majeure termination wrap-up clause
This clause handles unresolved issues after force majeure-based termination.
If this agreement is terminated due to a force majeure event, the parties agree to meet within [specific timeframe] to address any unresolved obligations or liabilities resulting from the termination.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.