The best examples of termination clauses in MSAs: practical examples for freelancers and clients

Let’s skip the theory and start with what people really search for: examples of termination clauses in MSAs: practical examples that match real freelance and agency work. Below are common scenarios and the kind of language you’ll actually see (or want to see) in a well-drafted MSA.

I’ll flag what the clause does, who it favors, and what to watch out for when you negotiate.

Example 1: Termination for convenience (either side can walk away)

This is the classic safety valve. Either party can end the MSA without alleging misconduct—usually with notice.

Sample wording (freelancer-friendly):

“Either Party may terminate this Agreement for any reason upon thirty (30) days’ prior written notice to the other Party. Upon termination for convenience by Client, Client shall pay Service Provider for all Services performed and approved Expenses incurred through the effective date of termination, plus any non-cancellable commitments made in reliance on this Agreement.”

What this does:

• Lets both sides exit without a fight.
• Protects you from getting stuck in a bad relationship.
• Ensures you’re paid for work already performed and reasonable commitments.

What to negotiate:

• Notice period: Clients push for shorter (7–14 days). Freelancers and agencies often need 30 days to manage cash flow.
• Non-cancellable commitments: If you hire subcontractors or buy software seats, make sure those costs are covered.

This is one of the best examples of a balanced termination clause in an MSA: it gives flexibility but still respects the work already done.

Example 2: Termination for cause (breach, non-performance, or bad behavior)

Termination for cause is the “you broke the rules, I’m out” clause. It usually requires a breach plus a cure period.

Sample wording (balanced):

“Either Party may terminate this Agreement upon written notice if the other Party materially breaches any provision of this Agreement and fails to cure such breach within fifteen (15) days after receiving written notice describing the breach in reasonable detail. Termination shall be effective upon expiration of the cure period if the breach remains uncured.”

Typical “cause” examples include:

• Repeated missed deadlines without justification.
• Non-payment beyond the agreed payment terms.
• Confidentiality or data security violations.

What to watch:

• Cure period: Too short, and it’s a trap. Too long, and you’re stuck in a bad situation. Fifteen to thirty days is common in U.S. service agreements.
• “Material breach” definition: Vague on purpose. Push to clarify with examples in a schedule or appendix.

For freelancers, this is a key example of a termination clause in an MSA that prevents a client from bailing over minor issues while still giving both sides an exit when trust is actually broken.

Example 3: Termination for non-payment (protecting your cash flow)

In 2024–2025, late payment is still one of the top complaints among freelancers and agencies. A specific non-payment clause gives you a clean exit.

Sample wording (freelancer-leaning):

“If Client fails to pay any undisputed amount within fifteen (15) days after the due date, Service Provider may suspend Services upon five (5) days’ prior written notice. If Client fails to pay any undisputed amount within thirty (30) days after the due date, Service Provider may terminate this Agreement immediately upon written notice. Client shall remain liable for all undisputed amounts owed through the effective date of termination.”

Why this matters:

• You don’t have to keep working indefinitely for a client who isn’t paying.
• Suspension gives you leverage before you pull the plug entirely.

This is one of the most practical examples of termination clauses in MSAs: practical examples like this are easy to negotiate because they sound reasonable to most in-house counsel.

For broader context on late payments and small business cash flow, see data from the U.S. Small Business Administration: https://www.sba.gov

Example 4: Termination on change of control (acquisitions, mergers, and chaos)

If your client gets acquired, your MSA might suddenly be governed by an entirely different company with new policies, systems, and expectations. A change-of-control termination clause gives you an out.

Sample wording (risk-aware):

“Either Party may terminate this Agreement upon thirty (30) days’ prior written notice if the other Party undergoes a Change of Control. ‘Change of Control’ means (a) a merger, consolidation, or reorganization resulting in a change in the entity that controls the Party, or (b) the sale of all or substantially all of such Party’s assets.”

When this helps:

• You’re a boutique agency working with a startup that might be acquired.
• You don’t want to be automatically absorbed into a huge enterprise vendor ecosystem with harsh terms.

For clients, this clause can also be used when a small service provider is acquired by a competitor or a company with a very different risk profile.

Example 5: Termination tied to minimum commitment or retainer

Retainer MSAs often have a minimum term. The client gets a better rate; you get predictable income. Termination needs to balance flexibility with that commitment.

Sample wording (retainer with early-exit fee):

“The initial Term of this Agreement shall be twelve (12) months (the ‘Initial Term’). Either Party may terminate this Agreement for convenience after the Initial Term upon thirty (30) days’ prior written notice. If Client terminates for convenience during the Initial Term, Client shall pay an early termination fee equal to two (2) months of the average monthly Fees invoiced during the preceding three (3) months.”

Why this works:

• You’re compensated for ramp-up time and opportunity cost.
• The client still has an exit option; it’s just not free.

This can be one of the best examples of a termination clause in MSAs for agencies with heavy onboarding or setup costs (e.g., marketing automation, complex integrations, or regulated industries).

Example 6: Termination for legal or regulatory reasons

Sometimes the world changes: new privacy laws, sanctions, or industry rules make the original deal risky or illegal. A regulatory termination clause acknowledges that reality.

Sample wording (compliance-focused):

“Either Party may terminate this Agreement immediately upon written notice if continued performance would violate applicable law, regulation, or binding order of a governmental authority, or would reasonably be expected to expose such Party to regulatory enforcement action. The terminating Party shall provide reasonable documentation supporting its determination upon request.”

Why this is increasingly common (2024–2025):

• Data privacy laws continue to tighten globally.
• Cross-border work, especially with health, finance, or education data, is more regulated.

If you handle sensitive data, it’s worth reading general guidance on data privacy from the Federal Trade Commission: https://www.ftc.gov

Example 7: Termination on insolvency or bankruptcy

No one likes to think about this, but you absolutely want it in your MSA.

Sample wording (standard):

“Either Party may terminate this Agreement immediately upon written notice if the other Party (a) becomes insolvent, (b) files a petition in bankruptcy or has a petition filed against it that is not dismissed within sixty (60) days, or (c) makes an assignment for the benefit of creditors.”

What this protects:

• You’re not locked into delivering work to a client who clearly can’t pay.
• A client isn’t stuck with a service provider that can no longer perform.

Law schools and legal clinics often publish plain-language guides to contracts and insolvency. For foundational contract concepts, see resources from Cornell Law School’s Legal Information Institute: https://www.law.cornell.edu

Example 8: Termination plus post-termination obligations

The best examples of termination clauses in MSAs don’t stop at “you can terminate.” They spell out what happens after termination:

• Who owns what.
• What must be returned or deleted.
• What survives (IP, confidentiality, payment obligations).

Sample wording (clean exit):

“Upon expiration or termination of this Agreement for any reason: (a) Service Provider shall cease performing Services; (b) Client shall pay all undisputed Fees and approved Expenses accrued through the effective date of termination; (c) each Party shall, upon written request, return or destroy the other Party’s Confidential Information, except as required by law or for archival purposes; and (d) Sections [Confidentiality], [Intellectual Property], [Indemnification], [Limitation of Liability], and [Payment] shall survive such expiration or termination.”

This is a strong example of a termination clause in an MSA that avoids the classic “Who owns the work if we break up?” fight.

How to adapt these examples of termination clauses in MSAs to your work

Seeing examples of termination clauses in MSAs: practical examples is helpful, but copying text blindly is risky. Contracts are context-driven.

Here’s how to make these examples work for you:

Match the clause to the business model
Project-based work (e.g., website builds) may need:

• Clear non-payment termination.
• Strong post-termination IP rules (who owns partial work?).

Retainers and long-term engagements benefit from:

• Termination for convenience with notice.
• Early termination fees or ramp-down periods.

High-regulation projects (health, finance, education) should emphasize:

• Legal/regulatory termination.
• Detailed data-handling and post-termination deletion.

If you’re working in or near healthcare, the U.S. Department of Health & Human Services has plain-language HIPAA resources that are useful context for MSAs involving health data: https://www.hhs.gov/hipaa

Balance flexibility and stability
Clients want the right to exit if you’re not performing. You want predictable revenue and protection from sudden cancellations.

A good negotiation pattern:

• Offer termination for convenience with longer notice (30–60 days) instead of no-notice exits.
• If the client insists on short notice, ask for a minimum commitment or early termination fee.

Clarify how disputes are handled
Termination for cause often depends on whether someone actually breached the agreement. That’s where dispute resolution and governing law interact with your termination clauses.

Even if your MSA doesn’t go deep on arbitration or mediation, you can:

• Define “material breach” with concrete examples.
• Spell out the cure process and communication expectations.

Common mistakes in termination clauses (and how to fix them)

When I review MSAs for freelancers and small agencies, I see the same termination mistakes repeatedly.

1. One-sided termination for convenience
A client can terminate anytime, but you can’t. That’s an obvious red flag.

Fix: Push for mutual rights. If they refuse, negotiate:

• Longer notice for client termination than for your termination.
• A minimum guaranteed payment if they terminate early.

2. No payment language tied to termination
The agreement says how to end it, but not what gets paid.

Fix: Borrow from the examples of termination clauses in MSAs above that explicitly say:

• All undisputed fees up to the termination date must be paid.
• Non-cancellable commitments are reimbursed.

3. Vague or missing post-termination IP rules
Who owns drafts, partial deliverables, or in-progress code?

Fix: Add language clarifying:

• Ownership before and after full payment.
• License rights if the project ends mid-stream.

4. No survival clause
If confidentiality, IP, or limitation of liability don’t survive termination, you’re in a risky spot.

Fix: Explicitly list which sections survive termination.

FAQ: examples of termination clauses in MSAs

Q1: What is a simple example of a termination clause in an MSA for freelancers?
A simple example of a termination clause might say that either party can end the agreement with 30 days’ written notice, and that the client must pay for all work completed up to the termination date. You can layer on more detail—non-payment, breach, or change of control—but that basic structure is a clean starting point.

Q2: Are termination for convenience clauses bad for freelancers?
Not automatically. They’re risky if there’s no notice period or minimum commitment. With a reasonable notice period and clear payment obligations, termination for convenience can actually protect you from being trapped in a toxic or unworkable relationship.

Q3: Can I use online examples of termination clauses in MSAs without a lawyer?
You can use online examples to draft a working version of your MSA, but you should have a qualified attorney review it—especially if the contract value is significant or you’re handling sensitive data. Think of these examples as templates for ideas, not final legal documents.

Q4: What are some other examples of events that should trigger termination rights?
Real examples include repeated security incidents, loss of required licenses or certifications, regulatory changes that make the project illegal, or persistent non-cooperation (like refusal to provide needed access or information). These can be written into your termination for cause section.

Q5: How long should the cure period be in a termination for cause clause?
For most freelance and agency MSAs, 10–30 days is common. Shorter for clear-cut issues like non-payment; longer for complex performance problems. The key is that the cure period is realistic for the type of breach you’re describing.

Use these examples of termination clauses in MSAs: practical examples as a drafting toolkit, not a script. Adjust the language to your risk tolerance, your pricing model, and the kind of clients you work with—then get a lawyer to sanity-check it before you sign.