Early termination fee
Also called Early termination charge, Cancellation fee
An early termination fee is what you pay to end a contract before its term is over, often a share of the remaining fees.
Why it matters to a budget owner
The fee is the price of getting out. It can be a fixed sum, a number of months' fees, or all fees to the end of the term.
Record it next to the renewal date. When a renewal goes wrong, the fee tells you whether leaving now costs less than staying.
What to record
- The amount or the formula
- When it applies
- Whether it falls over time
Frequently asked questions
Can an early termination fee be negotiated?
Often, especially before signing or at renewal. Vendors are more flexible when you are also discussing what you will keep buying.
General working knowledge about commercial contracts, not legal advice. Your own agreement governs.
Glossary
Look up related terms
- Termination for convenienceTermination for convenience lets one side end a contract without the other being at fault, usually with notice and sometimes a fee.
- Fixed-term contractA fixed-term contract runs for a set period, such as one or three years, and ends or renews when that period is over.