Understanding  Termination

Termination is a term that refers to the ending of a contract or an agreement. It can be initiated by either party involved in the contract or agreement. Termination can happen for many reasons, including breach of contract, expiration of the agreement, and mutual consent.

In this post, we will take a closer look at termination and answer the 7 most popular questions about it.

What is Contract Termination?

Contract termination is the process of ending a contract between two parties. This can happen for many reasons, such as breach of contract or mutual consent. When a contract is terminated, both parties are released from their obligations outlined in the agreement.

What is Subscription Cancellation?

Subscription cancellation is a type of termination that applies to subscription-based services. This allows customers to cancel their subscriptions at any time without being charged any further fees. Subscription cancellation can be initiated by either party involved in the subscription agreement.

What is Service Discontinuation?

Service discontinuation is another type of termination that applies to service-based agreements. When service discontinuation occurs, the provider of the service stops providing it to the customer. This can happen if there are issues with payment or if the customer breaches the terms outlined in the service agreement.

What is Early Termination Fee?

An early termination fee (ETF) is a fee that’s charged when one party terminates an agreement before its expiration date. For example, a cell phone provider may charge an ETF if a customer cancels their service before their contracted period ends.

What is Contract Buyout?

A contract buyout happens when one party buys out another party’s contractual obligations. For example, if one company wants to terminate its contract with another company early, it may offer to buy out the remainder of its contractual obligations.

Why Do Contracts Have Termination Clauses?

Contracts have termination clauses to outline what happens when one party wants to terminate the agreement. These clauses provide guidelines for how termination should be handled and what obligations each party has after termination.

Can Termination be Avoided?

Termination can sometimes be avoided if both parties are willing to negotiate and find a solution that works for everyone. However, in some cases, termination may be unavoidable due to irreconcilable differences or breach of contract.


  • “Termination of Contract” (J. F. Wilson)
  • Business Law: The Ethical, Global, and E-Commerce Environment” (Jane P. Mallor et al.)
  • “The Law of Contracts and the Uniform Commercial Code” (Pamela Tepper)
  • “Contracts for Dummies” (Scott J. Burnham)
  • “Understanding Business Law” (Jeffrey F. Beatty et al.)
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