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Contract law[]

Termination occurs when either party exercises its power under the agreement or as provided by law to end a contract. Contracts may be terminated either for convenience or for cause.

Uniform Commercial Code[]

Under Section 2-106(3) of the Uniform Commercial Code (U.C.C.),

termination occurs when either party pursuant to a power created by agreement or law puts an end to the contract otherwise than for its breach. On "termination" all obligations which are still executory on both sides are discharged but any right based on prior breach or performance survives.

Issues to be considered[]

When evaluating termination provisions, consumers should consider the following best practices:

Sample clause[]

Either party shall have the right to terminate this Agreement, prior to the expiration of the term (or any renewal term) hereof, upon the occurrence of any of the following events:
(a) Breach or default by the other of any of the terms, obligations, covenants, representations of warranties under this Agreement which is not waived in writing by the non-defaulting party. In such case, the non-defaulting party shall notify the other of such alleged breach or default and the other party shall have a period of thirty (30) days to cure the same; or
(b) If the other party is declared insolvent or bankrupt, or makes an assignment for the benefit of creditors, or a receiver is appointed or any proceeding is demanded by, for or against the other under any provision of the Federal Bankruptcy Act or any amendment thereof.


See also[]