Simple Termination Agreement Template

In this Agreement, the following words have the meanings given here.

"Original Contract" means the contract described at the beginning of this Agreement, including all amendments, orders, schedules, and related documents signed by both Parties before the Effective Date.

"Termination Date" means [termination date], the date on which the Original Contract ends under this Agreement.

"Final Payment" means the amount, if any, that one Party must pay the other under the section on Final Payments, as set out there.

"Property and Materials" means all items, equipment, documents, data, software, access credentials, samples, work product, and other materials, in any form, that belong to one Party and are held by the other Party in connection with the Original Contract.

"Confidential Information" means any non-public information that one Party has disclosed to the other in connection with the Original Contract, whether written, oral, or electronic, and that is marked confidential or would reasonably be understood to be confidential.

"Claims" means any claims, demands, actions, liabilities, damages, losses, costs, or expenses of any kind, whether known or unknown, existing now or arising later from the same facts.

"Representatives" means a Party's officers, directors, employees, owners, affiliates, agents, contractors, and advisors.

The Parties agree that the Original Contract ends on the Termination Date by mutual consent. Each Party waives any notice period, cure period, or other procedure the Original Contract would normally require for ending it.

Up to the Termination Date, the Original Contract stays in effect and each Party must keep meeting its duties under it, unless this Agreement says otherwise.

From the Termination Date, neither Party has any further duty to perform, and neither Party has any right to receive performance, under the Original Contract, except for the duties that continue under this Agreement.

Between the Effective Date and the Termination Date, the Parties will work together in good faith to wind down their activities under the Original Contract in an orderly way. The wind-down plan, if any, is: [description of wind-down steps or transition activities].

Each Party will tell its own customers, suppliers, and other third parties about the termination only as needed and in a way that is accurate and respectful. Any joint announcement must be agreed in writing by both Parties first: [communication arrangements, if any].

If there are any open orders, projects, or work in progress at the Termination Date, they will be handled as follows: [treatment of open items].

If this Agreement conflicts with the Original Contract about how the Original Contract ends, this Agreement controls.

Within [number] days after the Termination Date, [Party A / Party B] will pay [Party B / Party A] the amount of [amount and currency] as full and final settlement of all amounts owed under the Original Contract (the Final Payment). [Alternative: no Final Payment is owed by either Party.]

Payment must be made by [payment method] to the account stated in writing by the receiving Party: [bank or payment details].

Each Party confirms that, other than the Final Payment, it has been paid or has no further claim to payment for goods, services, fees, expenses, commissions, or other amounts under the Original Contract through the Termination Date. The exception is the following list of items: [list of any outstanding invoices or amounts, or "none"].

The paying Party is responsible for any bank charges on its side of the transfer. Each Party is responsible for its own taxes arising from the payments under this Agreement. If the law requires tax to be withheld, the paying Party may withhold it and will give the other Party proof of the amount withheld.

If a payment is late, the late amount will carry interest at [interest rate] per [period] from the due date until it is paid in full.

Any deposits, prepayments, or credits held by either Party under the Original Contract will be [refunded / applied / forfeited] as follows: [details].

Except for the Final Payment and the continuing obligations described in this Agreement, no other fee, penalty, termination charge, or compensation is owed by either Party because the Original Contract is ending.

Within [number] days after the Termination Date, each Party will return to the other, or, if the other Party asks in writing, securely destroy, all Property and Materials of the other Party in its possession or control.

Property and Materials must be returned in the same condition as received, apart from normal wear and tear. The returning Party will bear the cost of returning them unless otherwise stated here: [allocation of return costs].

Returns will be made to [return address or method] and the Parties will sign or exchange a written confirmation showing what was returned. The contact person for each Party is: [Party A contact name and details] and [Party B contact name and details].

If a Party destroys any Property and Materials or electronic data, it will confirm in writing, signed by an authorized person, that the destruction is complete. A Party is not required to delete backup copies kept in ordinary systems that cannot reasonably be deleted, as long as those copies stay protected and are not used for any other purpose.

Each Party may keep copies of records that it must keep by law or for accounting purposes, provided it keeps them confidential and uses them only for those purposes.

Each Party will end the other Party's access to its premises, systems, accounts, and platforms by the Termination Date and will cancel any credentials issued to the other Party.

If a Party does not return or destroy Property and Materials on time, the other Party may ask for them again in writing, and the Party at fault will promptly comply and pay the reasonable costs of recovering them.

The following parts of the Original Contract continue to apply after the Termination Date, because by their nature they are meant to continue: confidentiality, intellectual property ownership, indemnities, limits on liability, non-solicitation, payment duties for periods before the Termination Date, and [other surviving provisions].

Each Party will keep the other Party's Confidential Information secret, will use it only as allowed under the Original Contract, and will not share it with anyone except its Representatives who need to know it and are bound to keep it confidential. This duty lasts for [number] years after the Termination Date, and for trade secrets for as long as they remain trade secrets.

Confidentiality duties do not apply to information that is or becomes public through no fault of the receiving Party, was already lawfully known to it, was independently developed by it, or was lawfully received from a third party. A Party may disclose Confidential Information if required by law or a court or authority, after giving the other Party prompt notice where permitted.

Ownership of intellectual property stays as set out in the Original Contract. Any licenses granted under the Original Contract will [end on the Termination Date / continue as follows: [details]].

Any warranty, support, or maintenance duty under the Original Contract will [end on the Termination Date / continue for [period] as follows: [details]].

Any non-compete or non-solicitation duties in the Original Contract will [continue for [period] / end on the Termination Date].

The continuing duties will stay in force for the time stated in the Original Contract or, if none is stated, for [period] after the Termination Date.

Effective on the Termination Date, and subject to the payment of the Final Payment (if any), each Party releases the other Party and its Representatives from all Claims arising out of or connected with the Original Contract and its performance or termination.

This release covers Claims that a Party knows about and Claims it does not know about at the time of signing, to the extent they arise from events up to the Effective Date.

The release does not cover: (1) the duties created by this Agreement, including payment of the Final Payment; (2) the duties that continue after termination under this Agreement; (3) Claims for fraud, willful misconduct, or any liability that cannot lawfully be released; and (4) Claims by a third party against a Party that the other Party is required to cover under an indemnity that continues under this Agreement.

Each Party confirms that it has not transferred or assigned any Claim covered by this release to anyone else.

Each Party promises not to bring any lawsuit or other proceeding on any Claim that it has released under this Agreement.

Each Party confirms that it has read this release, has had the chance to get legal advice, and understands it is giving up rights.

This Agreement is a practical solution to end the Original Contract. It is not an admission by either Party of any fault, breach, liability, or wrongdoing.

Neither Party will claim that this Agreement, or any discussions leading to it, is evidence that the other Party did anything wrong.

Each Party keeps its position on any past disagreements about the Original Contract. Those disagreements are settled only to the extent stated in this Agreement.

This Agreement and the negotiations leading to it may not be used as evidence in any proceeding, except to enforce or interpret this Agreement.

If a Party is asked by a third party, such as an auditor, authority, or customer, why the Original Contract ended, it will say only that the Parties ended it by mutual agreement, unless the law requires more.

Each Party promises to the other that it is duly organized and validly existing, and that it has full power and authority to sign and carry out this Agreement.

Each Party promises that signing this Agreement does not break any other agreement, court order, or law that applies to it, and that the person signing for it is authorized to do so.

Each Party promises that it has not transferred, assigned, or pledged any right or obligation under the Original Contract to any third party, except as follows: [details, or "none"].

Each Party promises that it has not made, and is not aware of, any claim, demand, or proceeding by a third party that relates to the Original Contract, except: [details, or "none"].

Each Party promises that it has given the other Party accurate information about the matters covered by this Agreement and that it is not relying on any promise or statement that is not written in this Agreement.

Each Party promises to cooperate reasonably after the Termination Date, at no extra charge for minor requests, and to sign any further documents reasonably needed to carry out this Agreement.

Each Party will promptly tell the other if it learns that any promise it made in this section was untrue when made.

This Agreement is governed by the laws of [governing jurisdiction], without regard to rules that would apply the laws of another place.

The Parties will first try to settle any dispute about this Agreement or the Original Contract's termination through good-faith talks between their senior representatives. A Party starts this process by sending a written notice describing the dispute to the other Party.

If the dispute is not resolved within [number] days after that notice, the Parties will try mediation with a mediator chosen by agreement in [location], and share the mediator's costs equally: [mediation details].

If mediation does not resolve the dispute within [number] days after it starts, the dispute will be finally resolved by [courts of [jurisdiction] / arbitration under [rules or institution], seated in [place], in the [language] language, by [number] arbitrator(s)].

Either Party may go to court at any time to ask for urgent relief, such as an order to protect Confidential Information or Property and Materials.

Unless the decision-maker decides otherwise, each Party will pay its own legal costs, and the Parties will share equally the fees of the mediator or arbitrator. [Alternative: the losing Party pays the reasonable costs of the winning Party.]

While a dispute is being resolved, each Party will keep performing its duties under this Agreement that are not in dispute.

This Agreement is the entire agreement between the Parties about ending the Original Contract. It replaces all earlier discussions, understandings, and proposals on that subject. The Original Contract stays in place only as stated in this Agreement.

This Agreement may be changed only in a written document signed by both Parties.

Notices under this Agreement must be in writing and sent by hand, courier, or email to the addresses below, or to any other address a Party gives by notice: Party A: [notice address and email]; Party B: [notice address and email]. A notice is received when delivered, or, for email, when sent if no delivery failure message is received.

Neither Party may transfer its rights or duties under this Agreement without the other Party's written consent, except to a successor that takes over all of its business and agrees in writing to be bound by this Agreement.

If any part of this Agreement is found invalid or unenforceable, the rest remains in force, and the Parties will replace the invalid part with a valid one that is as close as possible to the original intent.

If a Party does not enforce a right under this Agreement, that does not mean it gives up that right. A waiver is valid only if it is in writing.

Each Party pays its own costs of preparing and negotiating this Agreement. This Agreement benefits only the Parties and their permitted successors, and no third party has any right under it.

This Agreement may be signed in counterparts and by electronic signature, and each signed copy counts as an original, and together they form one agreement.