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Contract Clauses

Plan a Cancellation Settlement Without Inventing a Kill-Fee Percentage

Separate completed work, committed costs, reserved capacity, and any agreed cancellation charge. There is no universal kill-fee percentage, and a template cannot establish a charge that was never agreed or legally permitted.

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Direct answer

What you need to know

Separate completed work, committed costs, reserved capacity, and any agreed cancellation charge. There is no universal kill-fee percentage, and a template cannot establish a charge that was never agreed or legally permitted.

Illustrative case — not a customer result

Illustrative case: a phased branding engagement stops after discovery but before concepts. Reconcile completed work and any applicable agreed cancellation provisions rather than automatically billing the full project or an arbitrary percentage. Rights, refunds, and termination procedures require careful review of the actual agreement.

Apply the decision

  • Locate termination and payment provisions
  • Reconcile completed milestones and committed costs
  • Obtain advice about charges and rights consequences

Boundary and limitations

A practical example is not legal advice or a statement that a cancellation charge will be enforceable.

Message for this situation

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Please refer to [termination section]. I will provide a reconciliation of completed work, applicable agreed charges, and the status of deliverables for review.

Decision record to complete

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Cancellation date: [complete for this project]
agreement provision: [complete for this project]
completed work: [complete for this project]
committed costs: [complete for this project]
payments: [complete for this project]
proposed settlement: [complete for this project]

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Frequently asked questions

Which resource should I use next?
Use the linked primary resource for the actual artifact or decision framework. This article addresses the narrower task: prepare cancellation terms for legal review.
What should I avoid assuming?
A practical example is not legal advice or a statement that a cancellation charge will be enforceable.

Continue with the next decision

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