If you’ve ever had that sinking feeling that a client relationship is about to go south, whether it’s because they’re being unresponsive, constantly changing their mind, or ignoring your boundaries, you’re not alone.
I’d be willing to bet that every online business owner and service provider out there has that one client story. The one where what started as a dream collaboration turned into a drain on your energy, time, and sanity.
When things start to feel unaligned with a client, it can cause a lot of uneasiness because well, you committed to the project, right? Sure… but if you wrote your client contract correctly, then you should have a legal way out.
Because even though you want to uphold your professionalism and serve the client well, sometimes the best and most professional thing you can do is walk away. And YES, you can legally do that – as long as your contract says so!
Without the right clause in your contract, however, the decision to break up with a client can turn into a legal and financial nightmare, but that’s what I’m here to help you avoid! Keep reading to learn about the one clause that can save you from working with a nightmare client.
What Is a Termination Clause (and Why You Need One)
A termination clause is the part of your contract that spells out how either party can end the agreement and under what circumstances. It protects both you and your client by creating structure and clarity around what happens if someone needs to end the project early.
For service providers like coaches, designers, and virtual assistants, this clause is non-negotiable as it keeps you from being tied to a sticky situation and ensures that if a project or client dynamic stops working, you can exit gracefully and legally!
Think of it as your “escape hatch.” You hope you won’t have to use it, but you’ll be reallyyyyy glad it’s there if you do.
What to Include in a Strong Termination Clause
A good termination clause doesn’t just say “either party can end this agreement.” Instead, it clearly outlines how and when that can happen.
Here’s what to include in your contract termination clause:
- Notice Period – specify how much notice must be given before termination. Typically service providers want at least a 30 days notice.
- Written Notice Requirement – make it clear that notice must be provided in writing via the communication channel of your choosing (preferably email)
- Refund Policy – state whether refunds will be issued or not. Most service providers include language that work completed to date is non-refundable.
- Outstanding Payments – clarify that any payments due for completed work or deliverables must be paid in full before termination is finalized
- Cause vs. No Cause – decide whether termination is only allowed for “cause” (like breach of contract or missed payments) or for “no cause” meaning either party can end the contract for any reason
While this might sound more formal than you’re used to being with clients, it’s the kind of clarity that you shouldn’t skip! It keeps everyone on the same page and helps you avoid emotional or messy exits later.
Common Scenarios Where a Termination Clause Saves You
Soooo, when might you actually take advantage of a termination clause in your contract? Though it might seem like it’s there “just in case,” there are actually some very common real world scenarios where service providers use their termination clauses all the time.
Here’s a few that you might even be able to relate to:
The Ghosting Client 👻
You’ve delivered half the project, but your client disappears – the classic ghosting client that you hope you never have to deal with, but unfortunately happens from time to time.
Your termination clause allows you to formally end the contract after a set period of non-communication and invoice for work completed.
The Scope Creep Spiral 😵💫
Your client keeps adding new requests and ignoring boundaries – that my friends is what we call scope creep. If it keeps happening and you’ve decided you’ve had enough, your termination clause lets you end the relationship if they fail to adhere to agreed-upon terms or payment schedules.
The Misaligned Fit 🫣
Let’s be real for a second – as a service provider, it can feel REALLY exciting to see a new inquiry come through. And sometimes that excitement allows you to overlook whether or not a potential client is actually a good fit or not.
After a few sessions or early deliverables, you might realize the project or the person isn’t aligned and in this instance, a no-cause termination option lets you both part ways amicably without breaching the contract.
The Client Who Demands a Refund Mid-Project 💸
I’m not sure what’s worse – a client that ghosts you and avoids their payments altogether or a client who demands a refund mid-project. Both aren’t ideal situations, which is why using proper refund language in your termination clause is so important!
Your refund policy that you include in the termination clause protects you from having to return payment for completed or non-refundable work.
When to Use Termination vs When to Renegotiate with a Client
Even though your termination clause gives you an out, it’s important to recognize that sometimes you don’t necessarily want to cut off a client, but would instead rather assess and adjust their project to fit their changing needs or mindset.
Because sometimes a client isn’t “bad” – it could just be that somewhere along the way their priorities have changed or they’ve gotten a little too comfortable with the working relationship and simply need a conversation.
As a service provider, you’re always allowed to use your best judgment and decide if you want to keep serving the client or if you’d rather use the termination clause that’s at your disposal.
In the instance that you DO want to keep the client, you might simply choose to renegotiate scope, extend timelines, or create a change order.
Generally speaking, the termination clauses should mainly be used when:
- They’ve stopped communication entirely
- They demand work outside the original scope, but won’t pay
- The working relationship becomes difficult to manage
When or if you decide to terminate the client, it’s important that you follow all the necessary steps too, just as you would expect them to. This means doing it cleanly, fairly, and in writing, referencing the clause in your contract.
How to Phrase Your Contract Termination Clause
If you’re not sure exactly how to craft your termination clause for your client contracts, here’s a simplified example you can use as a model:
“Either party may terminate this Agreement upon [insert #] days’ written notice. Upon termination, Client shall pay for all services performed and expenses incurred through the effective date of termination.
No refunds will be issued for services already rendered. Contractor shall deliver all completed work, drafts, or materials up to the termination date. After termination, neither party has obligation to provide additional services unless otherwise agreed in writing.”
What Happens If You Don’t Include a Termination Clause?
And if you choose not to include a termination clause in your client contracts…
- You may be forced to honor a client’s demands even when they’ve crossed boundaries.
- You’ll have no legal baseline to claim compensation for work already done.
- You can’t clearly end the working relationship without risking breach claims.
- You may be left in limbo, doing work for free or chasing someone whose communication dropped off.
Basically you’re removing your safety net, so my suggestion is to include it so that it’s there just in case you ever need it!
The One Stop Contract Shop for Online Business Owners and Service Providers
No matter your niche, whether it’s coaching, design, VA, consulting, a strong termination clause is already baked into every contract template I create for The Boutique Lawyer! This is because I don’t want you to have to guess at how to write it or wonder whether it’s enforceable.
Each contract template is drafted by a lawyer (hiii, it’s me!) who understands how online service businesses operate and always includes:
✔️an attorney walkthrough video from yours truly
✔️ Word and Google Doc versions (so you can easily edit in whichever platform you love best)
✔️ a customization guide that you can follow step by step
✔️ AND future updates included if the legal landscape ever shifts!
CLICK HERE to browse the TBL Contract Template Shop to find the contracts that your business needs specifically.
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Written by Amber Gilormo, founder of The Boutique Lawyer, a licensed attorney who helps creative entrepreneurs protect their work with legally sound contracts, trademarks, and business systems. Her signature collection of creative-friendly legal templates has supported over 7,000 business owners in protecting and scaling their brands.
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