[et_pb_section fb_built=”1″ theme_builder_area=”post_content” _builder_version=”4.17.6″ _module_preset=”default”][et_pb_row _builder_version=”4.17.6″ _module_preset=”default” theme_builder_area=”post_content”][et_pb_column _builder_version=”4.17.6″ _module_preset=”default” type=”4_4″ theme_builder_area=”post_content”][et_pb_text _builder_version=”4.17.6″ _module_preset=”default” theme_builder_area=”post_content” hover_enabled=”0″ sticky_enabled=”0″]<\/p>\n
Termination for Convenience Clauses.\u00a0<\/span><\/b> Consider whether adding a termination for convenience clause to your contracts makes sense.\u00a0 <\/span>Particularly for nonprofit organizations, I have been adding in language to third-party services contracts that allow for exit\/termination for any reason.\u00a0 <\/span>This language, if negotiated properly, allows for easy and low-to-no cost exits if you need to get out of an arrangement. Of course one size does not fit all.\u00a0 <\/span>So careful analysis of the terms and conditions along with intent of the parties would be necessary to understand if a TCC would work on a particular deal. \u00a0<\/span><\/p>\n But what if the vendor says no?\u00a0 <\/span>My attitude is this, especially for nonprofits, if someone wants to do business with you they need to respect the charitable needs of your organization.\u00a0 <\/span>I have seen numerous nonprofit organizations get themselves into contracts that don\u2019t work out as expected.\u00a0 <\/span>Or maybe economic conditions change and donor gifts slow down making payment for services difficult.\u00a0 <\/span>Whatever the reason, a termination for convenience clause, in theory, allows for a simple exist at little to no cost (depending on obligations under the contract).\u00a0 <\/span>An example of such a clause would look something like this:\u00a0<\/span><\/p>\n Termination for Convenience<\/b>.\u00a0<\/span><\/p>\n \u201cClient may terminate this agreement at any time and for any reason by providing Contractor with 30 days written notice.\u201d\u00a0 <\/span>Or\u00a0<\/span><\/p>\n \u201cClient may terminate this agreement for convenience by providing Service Provider with 14 days written notice.\u201d \u00a0<\/span><\/p>\n Of course it is important to also address obligations of either party upon termination.\u00a0 <\/span>Further, if there is pushback by the third-party contractor, the termination for convenience clause may be made reciprocal providing the contractor with the same terms for exist. \u00a0<\/span><\/p>\n Be sure to get legal advice on any contract.\u00a0 <\/span>This short explanation on termination for convenience clauses is in no way intended to be legal advice.\u00a0 <\/span>No attorney client relationship exists unless established in writing.\u00a0 <\/span>Contact me to learn more.\u00a0<\/span><\/p>\n Best wishes in all of your endeavors!<\/p>\n Royce Hood
\nLaw Office of Royce Aaron Hood<\/p>\n