Many commercial disputes arise after a relationship has broken down—not while the parties are performing.
Termination clauses should therefore be reviewed before the contract is signed. A proper clause should address grounds for termination, notice, cure periods where relevant, immediate termination events, consequences of termination, outstanding payments, return of property, confidentiality, intellectual property and survival of important obligations.
A party that terminates without following the agreed mechanism may create a new dispute even where the underlying commercial relationship has become unsustainable.
Equally, a contract may give different consequences to termination for convenience and termination for breach. Those distinctions should not be overlooked.
The practical question is: if the relationship ended tomorrow, would the agreement clearly tell both sides what happens next?
If the answer is no, the contract may be creating more risk than it appears to remove.