The tip for today is: Be aware of termination rights in the contract
🚨 Parties sign up to a contract with expectations that the collaboration will proceed smoothly. Sometimes though, things won’t go as planned or circumstances may change.
🚨 Customers will ideally seek a break clause for convenience enabling them to exit the contract with no liability to the supplier. Suppliers may also want a break clause to enable them to exit an unprofitable contract, but will want to make sure that any termination rights ensure they recover their investment costs.
🚨If you do want to exit a contract, you need to make sure you follow the requirements of the contract when giving that notice. Some rolling contracts say that the parties need to give a fixed amount of notice by a certain date. Be aware that if you miss that date, you may be stuck with the contract for another year.
🚨Where a contract contains express termination provisions, the courts will not readily imply additional termination rights into the contract. So you really need to include precise exit rights in contracts from the outset.