Reading the exit provisions
Many commercial contracts allow termination in more than one way. Termination for cause usually depends on a material breach and often requires written notice and a chance to cure before it takes effect. Termination for convenience, where the contract provides for it, lets a party end the deal without a reason, typically with notice and sometimes with a payment. Some contracts run for a fixed term and renew automatically unless someone objects in time. Where the document is silent, general contract law fills the gap, and New York courts generally hold businesses to the termination terms they actually agreed to.
How a termination goes wrong
The most common mistake is ending a contract without following its procedure: skipping the notice, sending it to the wrong address, or not letting the cure period run. A termination that does not comply can itself be treated as a breach, which turns the party that felt wronged into the party being sued. Another risk is continuing to accept performance after learning of a breach, which can complicate a later argument that the breach justified ending the deal. If the other side has announced that it will not perform, that statement may give you rights, but how you respond to it matters. Statements to customers or suppliers about why the relationship ended can also create claims of their own.
Before the notice goes out
Bring the contract with every amendment, the correspondence about performance problems, and any record of earlier notices or waivers. We look at which termination right applies, what notice the contract requires and how it must be delivered, and which obligations survive the end of the contract, such as confidentiality or payment for work already done. We also consider whether ending the relationship is the right business decision, or whether a negotiated exit or an amendment would cost less. A termination of contract is easier to get right the first time than to defend afterward.
