Don’t define “material breach”

Some contract drafters define material breach in their termination provisions. They find “material” too vague on its own. That’s a mistake because defining the concept can limit your rights in ways you’ll eventually find unacceptable. And “material breach” is not vague, believe it or not. A contracting party needs the right to terminate for the […]

Why a notice period to terminate for convenience?

In service contracts, termination for convenience clauses often call for a long notice period. The customer (usually) can terminate for any reason, but it has to give 90 days’ notice — or maybe 180 days’ or more. In many cases, the customer also has to pay an early termination fee. But if the fee compensates […]