Termination

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“Begin with

the End

in Mind“

The 7 Habits of Highly Effective People ” Stephen Covey

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PRINCIPLES

4

ALL

UNDERLYING

DISCUSS

WE

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Think about

what would happen

if we took the words

away

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IF we

both

agree we

can change

the world

2

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The start and end of the contract is distinct from the start and end of

obligations in the contract

3

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What matters is

what it is irrespective

of what it is called

or where you found it.

4

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5

QUESTIONS

WHEN DOES THE CONTRACT START?

FOR HOW LONG DOES IT CONTINUE?

WHEN AND HOW DOES IT END?

WHAT DO I HAVE TO DO IN ORDER TO TERMINATE?

WHAT DO I HAVE TO DO AFTER I TERMINATE?

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RULES

6

  1. All individuals organized into teams.
  2. One individual in order per team to guess.
  3. A named possibility from slide found on paper = 1 point.
  4. Only one guess per individual.
  5. No conversations among yourselves.
  6. Our decision is final.

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1. When does the Contract start?
(Only 2 possibilities)

  1. When the contract is accepted by both parties

(e.g. Execution Date)

OR

  1. A date designated in the contract

(e.g. Effective Date)

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2. For how long does it continue?
(Also called the ‘Term’)

  1. Specified OR Unspecified?
  2. Fixed, Perpetual OR Variable.
  3. Renewals.
    • Automatic renewals (notice not to continue)
    • Condition and option to renew
    • Renewal (with consent)

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3. When does the contract end?
(also called ‘Termination’ or ‘Discharge’)

Specified OR Unspecified?

(Only 5 possibilities)

  1. Performance – Term completion, Final payment

Last milestone, Final acceptance

  1. Breach
    • Material breach OR other breach
    • General description OR specific triggers
    • In one place OR scattered across the contract

E.g. Change of control,

What about Assignment/Subcontracting?

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3. When does the contract end?
(also called ‘Termination’ or ‘Discharge’)

(Only 5 possibilities)

  1. Agreement – Termination for convenience

Non-renewal option exercised

  1. Frustration – Force Majeure, Bankruptcy

Change of laws etc.,

  1. Perpetual

/Beyond Term – Remedies, Negative covenants,

termination related obligations,

interpretation clauses,

consequences of current actions.

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4. What do I do in order to terminate?

  • Usually (not always) provide notice of termination

  • Sometimes
    • Advance notice (Long OR short notice periods)
    • Opportunity to cure OR (multiple opportunities)
    • Early termination penalty

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5. Termination related obligations?

  • Stop exercising rights
    • Make pending payments
    • Return materials, IP and confidential information
    • Assist in transition or knowledge transfer

AND

  • Surviving obligations

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