Glossary
Termination for cause
termination for causeTermination for cause is ending the contract because of a defined breach, insolvency or similar default, rather than for convenience. It usually needs a notice that names the breach, and often a cure period. It is not the same as accepting a repudiatory breach at common law. Say what is owed: work done, a kill fee, or nothing.More in the glossary is ending the contract because of a defined breach, insolvency or similar default, rather than for convenience. It usually needs a notice that names the breach, and often a cure periodA cure period is a window, after notice of breach, in which the defaulting party may put the breach right before termination for cause can follow. It is a contractual device, not an automatic common-law right. Serious or irremediable breaches are often carved out. Write how notice is served and when the clock starts.More in the glossary. It is not the same as accepting a repudiatory breachA repudiatory breach is a failure that goes to the root of the contract, entitling the innocent party to treat the deal as at an end and claim damages. In England and Wales the Hong Kong Fir [1962] 2 QB 26 test is whether the breach deprives the innocent party of substantially the whole benefit of the contract.More in the glossary at common law. Say what is owed: work done, a kill feeA kill fee is a payment due to a creator or supplier when a client cancels a project before it is finished.More in the glossary, or nothing.
Last updated 28 October 2026
Convenience is “we can leave on 30 days.” Cause is “you broke something serious.” The list is usually material breach that is not cured, insolvency, and a handful of named events. Common-law repudiatory breach sits beside the clause: you can accept a repudiation even if the clause’s list is narrower, unless you have clearly given up that right.
We write the list, the cure period, and the money consequences. Lex will not treat a convenience walk as cause, or the other way around. After cause, the innocent party is typically owed work done and any late fee; a kill fee is the convenience price and should not be paid to the party in breach.
How is it different from termination for convenience?
Termination for convenience needs no breach and usually a notice period plus a price. Cause needs a defined default and usually a cure. Mixing the two — “we termination for convenienceTermination for convenience means one side can end the contract without claiming the other side did something wrong, usually after giving notice.More in the glossary because you were late” — is how the money calculation goes wrong. Pick the door you are actually walking through.
Do I have to offer a cure period?
Only if the clause says so. Common-law repudiation does not include a free cure period. If you have promised one, give it, or you may be the party in breach. Carve out leaks, insolvency and breaches that cannot be undone.
What is owed after termination for cause?
Write it. The usual innocent-party package is: fees for work properly done, expenses incurred, and the right to prove loss subject to the liability cap. The defaulting party is not owed a convenience kill fee. IP already assigned stays assigned if it was paid for; unused depositA deposit is money paid up front, before the main work or the final invoice.More in the glossary are dealt with on their own line.
Should the contract also keep the common-law right?
Yes. A line that says “this is without prejudice"Without prejudice" is a label commonly put on settlement communications to signal they are not meant to be used as evidence against the sender.More in the glossary to any other right, including to accept a repudiatory breach” stops the clause being read as a complete code. Rice v Great Yarmouth BC [2000] All ER (D) 1447 is the warning about treating every small breach as a right to walk.
A worked example
A services agreement lets either party terminate for material breach if it is not cured in 14 days, and for insolvency at once. The client stops paying. The studio serves a notice that names the invoices and the 14 days. Nothing arrives. The studio terminates for cause, invoices work done, and does not credit a convenience kill fee. If the client had simply changed its mind, that would have been convenience, with the agreed cancellation scale.
How it shows up in a contract
Sample wording · our own drafting
A party may terminate this agreement with immediate effect if the other party commits a material breach and does not remedy it within 14 days of written notice, or if the other party becomes insolvent. Termination under this clause is without prejudice to any other right, including to accept a repudiatory breach. Fees for Services properly performed remain payable. A cancellation fee that applies to termination for convenience does not apply.
In Plain English
You can end the contract at once if the other side commits a serious breach and does not fix it in 14 days after written notice, or if they go insolvent. Other rights stay, including the right to treat a fatal breach as the end. Work properly done is still paid. The convenience cancellation fee does not apply.
Common mistakes
- Calling a convenience walk “for cause” to avoid a kill fee.
- Terminating for cause without the promised cure period.
- Treating every small slip as cause, against Rice v Great Yarmouth.
- Forgetting to keep the common-law right to accept a repudiatory breach.
Frequently asked questions
What is termination for cause?
Ending the contract for a defined breach, insolvency or similar default, not for convenience. It usually needs a notice and often a cure period.
How is it different from termination for convenience?
Convenience needs no breach and usually a notice plus a price. Cause needs a default. See /glossary/termination-for-convenience.
Do I have to offer a cure period?
Only if the clause says so. If you promised one, give it. Carve out leaks and insolvency. See /glossary/cure-period.
What is owed after termination for cause?
Write it. Usually fees for work properly done, not a convenience kill fee. Loss is subject to the liability capA liability cap is the maximum amount one party can be asked to pay the other under a contract.More in the glossary. See /glossary/kill-fee.
Related
Related clauses and templates
The legal wording governsLast reviewed 28 October 2026Pending lawyer review