If you’ve been in business for more than a minute, I’m more than willing to bet that you’ve probably been ghosted a time or two.
Maybe a client disappeared mid-project. Maybe they stopped responding to emails once the invoice hit their inbox. Or maybe they signed a contract, paid a deposit, and then decided they “weren’t ready” to move forward after you’d already blocked off your calendar.
Annoying? Yes. Business-ending? Not if you’ve protected yourself legally.
There’s one major clause that EVERY client contract needs to include if you truly want to protect yourself in the instance that a client ghosts you.
And that is a termination clause.
A termination clause is the unsung hero that makes sure you’re not left holding the bag when a client relationship comes to an abrupt or messy end.
Since it’s so important, in this blog post I’m covering what exactly a termination clause is and why it’s a non-negotiable for your contracts, regardless of the type of service you provide.
What Exactly Is a Termination Clause?
First things first, let’s cover what a termination clause even is.
In plain English, a termination clause is the section of your contract that outlines how and when the client relationship can be ended and what happens when it is.
This clause very specifically covers:
- Who can end the contract (you, the client, or both)
- How much notice must be given before ending the relationship
- What payments are due if the agreement is cut short
- What work (if any) will still be delivered after termination
Think of it as the legal version of boundaries (which by the way, I have a wholleeee blog post talking about boundaries in business and how your contracts help you set them).
This clause can specifically help protect your time, your energy, and your bank account if a client suddenly changes their mind or goes MIA.
Why Termination Clauses Matter in Your Contracts
Without a termination clause, ending a client relationship becomes murky and when things are murky, misunderstandings (and disputes) are quick to follow.
So here’s a few reasons why this clause deserves a prime spot in your client agreements:
Protection From Ghosting
As crazy as it might sound, there are clients out there who decide to vanish mid-project. And as a service provider it can be one of THE most frustrating things to deal with.
But with an effective termination clause in place, you’re not left chasing them down endlessly. Instead, you have clear terms that say what happens if they stop communicating.
For example, if they disappear for 30 days, you may have the right to close the project and keep payments collected to that point.
Payment Assurance
Speaking of payments, a strong termination clause works hand-in-hand with your payment terms. If a client decides they don’t want to finish the project, your clause can require them to pay for all work completed (or even the full amount, depending on how you structure it).
This way, you’re not stuck refunding money for time you’ve already invested.
Clarity Around Refunds
Along the lines of refunds, your contract should make it crystal clear that refunds aren’t automatic just because your client wants to end the relationship. Instead, your clause should spell out if and when refunds are available.
And spoiler: “no refunds after work has begun” is a very common and enforceable structure!
(P.S. If you aren’t sure how to craft an effective “no refund” policy, click here!)
Professionalism and Boundaries
Okayyy, but what if YOU are actually the one who wants out? While yes, clients can often be the ones asking to end the working relationship, there may be times that you actually need an exit strategy.
Maybe a client is disrespectful, constantly late with payments, or disregards your process, all of which make the project more stressful and difficult than what it’s even worth.
Well luckily, your termination clause gives you the ability to legally and gracefully say, “This isn’t working, and here’s how we’ll wrap it up.”
So while yes, in many cases your termination clause serves to protect you, in the instance of a client ghosting you or wanting to walk away, it also gives you a leg up if needed!
What a Strong Termination Clause Looks Like
The good news is that you don’t need to be a lawyer to understand the basics of what goes into writing an effective termination clause.
At a minimum, it should include:
✔️ Notice period that states how much notice is required from either party wishing to terminate the agreement
✔️ Payment obligations that the client is responsible for up to the date of termination
✔️ Refund policy that specifies whether any portion of unused services are refundable (and usually, they’re not)
✔️ Deliverables upon termination, clarifying what work (if any) will be handed over once the contract ends
Here’s a quick look at how a termination clause typically reads:
"Either party may terminate this Agreement upon written notice. In the event of termination, the Client shall remain responsible for payment of all Services performed and expenses incurred through the date of termination. No refunds shall be issued for Services already rendered."
That’s it! Simple, clear, and legally enforceable.
Additional Must-Have Client Contract Clauses Needed To Fully Protect Yourself and Your Business
So, it’s clear that having a termination clause in your client contracts is important, but I just want to be clear – that’s not the ONLY clause you need to fully protect yourself and your business when working with clients.
The clauses that your contracts need can vary depending on your industry and the type of work you do, but generally speaking, the 5 most important contracts that every client contract needs (in addition to your termination clause) are:
- Scope of Work
- Payment Terms
- Project Timeline
- Quality Assurance
- Intellectual Property Rights
I dive deep into each of those in this blog post!
And here’s a few industry specific resources you might need:
➡️ 4 Key Clauses to Include in Your Brand or Web Design Agreements
➡️ 5 Hardest Working Clauses in Your Terms of Purchase for Digital Products
➡️ 6 Key Things Every Business Coaching Contract Should Cover
Overall, since every business is unique, the exact clauses you need can look a little different depending on your industry, the services you provide, and even the way you structure your client process.
That’s why I don’t recommend piecing together contracts from free templates or DIY’ing your own because you could easily miss something critical that leaves you unprotected.
Instead, investing in lawyer-drafted templates gives you a solid legal foundation you can confidently customize to your business. That way, you’re not just checking a box, you’re actually protecting your time, income, and client relationships.
And that’s exactly what The Boutique Lawyer is for! Through the TBL Contract Shop, you can find the contracts you need for your specific industry that cover the must-have clauses (termination included) without having to worry about leaving something out.
CLICK HERE to browse by industry and if you aren’t exactly sure what you need, I’m always here to help – simply send me a DM and I’d be glad to guide you in the right direction.
* * *
If you like what you just read and want more cool lawyer things in your life, here’s a few ways to stay connected:
Let’s be pen pals! Subscribe to my email list to receive all of my best biz tips and behind the scenes goodies to keep your business bringing in sales (legally of course).
Binge the blog to get all of the legal information you need about running a business in a way that actually makes sense to your non-legal brain.
Come hang with me on the ‘gram! I often do AMA’s on stories, so you can submit your specific questions when they come up.
And if you’re in need of legal resources that you can ACTUALLY understand? Here’s a few ways I can help:
Browse the contract template shop to find what’s missing in your biz and easily implement it with a plug and play template!
Need something else? Send me a DM! Always happy to lend a legal hand when I can.