Termination clauses are often overlooked when businesses sign a commercial contract, yet they are one of the most disputed provisions when relationships break down. Clear and practical termination terms can prevent costly disagreements and protect your business interests.
Two common pitfalls we see in commercial contracts are:
1️⃣ Notice periods that don’t reflect reality
Some contracts set notice periods that are too short or too long. A supplier locked into a six-month notice period may continue supplying at a loss, while a customer given only 14 days’ notice may struggle to replace a critical service.
2️⃣ Ambiguity around payment on termination
Many agreements don’t clarify what happens with upfront payments, deposits, or work-in-progress if the contract ends early. This can lead to disputes over refunds or compensation.
💡 The key is clarity. Businesses should carefully review termination clauses before signing a contract and ensure they align with the commercial and operational realities of the relationship.
At our firm, we help businesses across Australia and New Zealand draft and negotiate commercial contracts with clear termination provisions, reducing risk and protecting your business’s success.