Termination Provisions – Maximizing Flexibility in Contracts
Termination rights are a crucial and frequently negotiated aspect of complex commercial agreements, write Peter M. Watt-Morse and Glen Rectenwald in the Morgan, Lewis & Bockius blog, Sourcing @ Morgan Lewis.
In addition to providing protection in the event that a vendor defaults, the ability to walk away from negotiations regarding modifications or renewals can also be a powerful tool for creating negotiating leverage,” they explain. “Flexible termination options, termination assistance, and other termination rights can manage the risks of transitioning to a new provider and provide credible alternatives for future negotiations.”