How can I use early termination clauses to protect my business?

Here are some common pieces you might see in an early termination clause:

• Define the rules for ending early. Spell out when and how a client can terminate — like requiring written notice or a minimum notice period.
• Add a fair termination fee. This covers lost revenue or costs you've already incurred. The fee should be clearly stated and reasonable.
• Address deposits and payments. Clarify whether deposits are refundable and what payments are still owed for completed work.
• Include exceptions. Note situations like emergencies or uncontrollable events where the rules may change.

Having these terms in place prevents confusion, protects your income, and helps maintain professional relationships even when projects end early.

What to consider in your specific situation

Each business and contract is different, and your approach may depend on:

• The type and value of the services you provide.
• The exact language used in your contract.
• Applicable state or local contract laws.
• Your refund and payment policies.
• The reason for early termination.

Since every situation is unique, you can use Rocket Copilot to get legal information about early termination clauses, or connect with a Legal Pro to learn more about your options.