Termination for Convenience
A termination-for-convenience clause lets either party end the contract without cause -- for any reason or no reason -- typically subject to a defined notice period.
In short
- Doesn't require a breach or default -- either party can walk away for any reason.
- Almost always requires advance written notice, commonly 30 to 90 days.
- Needs clear terms for what happens to in-progress work, payment for work completed, and any wind-down costs.
- Distinct from termination for cause, which requires a breach and usually a cure period first.
Why it exists
Business circumstances change -- budgets get cut, priorities shift, a project no longer makes sense -- and termination for convenience gives either party an exit that doesn't require proving the other side did something wrong. In exchange for that flexibility, it typically comes with a notice period so the other party isn't left stranded without warning.
What needs to be defined alongside it
A convenience-termination clause without clear payment terms for work-in-progress leaves an obvious dispute waiting to happen: does the vendor get paid for partially delivered milestones, unbilled hours, or wind-down costs like reassigning staff? The clause is incomplete if it states the right to terminate without also stating what gets settled when it's exercised.
How ScopeWise checks this
ScopeWise's Legal agent explicitly extracts whether termination for convenience is defined and with what notice period -- separate from termination for cause and its cure period -- and flags a missing termination clause as a legal risk category on its own.