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ARTICLE · 17 MAY 2022

Termination For Convenience Clauses

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Do parties always need a valid reason to terminate a contract? The short answer is yes, you do need a valid reason to terminate your contract.

South AfricaCorporate/Commercial Law
Kayla Ferreira
Kayla Ferreira
Ridwaan Boda
Ridwaan Boda
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Do parties always need a valid reason to terminate a contract? The short answer is yes, you do need a valid reason to terminate your contract. This is generally referred to as "termination for cause" right, unless you have a "termination for convenience" clause in your contract that will enable you to exit the contract without having a reason for doing so.

A termination for convenience clause is often one of the most contentious clauses discussed during contract negotiations due to the power it grants to a contracting party, who is entitled to exit the contract at any time and for no specific reason.

Contracting parties view a termination for convenience clause as being risky for various reasons:

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