Mutual Contract Termination Agreement Template

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This Mutual Contract Termination Agreement (the “Termination Agreement”) is entered into as of [Effective Date] by and between:

Party A: [Full Legal Name], with an address at [Address] (“Party A”).

Party B: [Full Legal Name], with an address at [Address] (“Party B”).

Party A and Party B may be referred to individually as a “Party” and collectively as the “Parties.”

1. Background

1.1 Original Agreement. The Parties entered into [Name of Original Agreement] dated [Original Effective Date] (the “Original Agreement”).

1.2 Termination Intent. The Parties desire to terminate the Original Agreement by mutual consent under the terms of this Termination Agreement.

2. Termination

2.1 Termination Date. The Original Agreement will terminate effective [Termination Date] (the “Termination Date”).

2.2 No Further Performance. Except as stated in this Termination Agreement, the Parties will have no further obligation to perform under the Original Agreement after the Termination Date.

3. Final Deliverables and Transition (Optional)

3.1 Final Deliverables. By the Termination Date, the following deliverables will be completed (if any): [List].

3.2 Transition Assistance (Optional). Party [A/B] will provide transition assistance until [Date], limited to: [Scope], at a rate of $[__]/hour (or included).

3.3 Access Changes. The Parties will remove access to systems/accounts by: [Date].

4. Final Payments and Settlement

4.1 Outstanding Amounts. Amounts due as of the Termination Date: $[Amount], owed by: ☐ Party A ☐ Party B.

4.2 Final Invoice. Final invoice will be issued by [Date] and paid within [**] days of receipt.

4.3 Refunds/Credits (Optional). Any refund/credit owed: [Describe], to be issued by [Date].

4.4 Expense Reimbursement (Optional). Approved expenses will be reimbursed within [**] days upon documentation.

5. Return of Property and Confidential Information

5.1 Return/Destruction. Each Party will return or destroy the other Party’s property and Confidential Information by [Date].

5.2 Company Materials. Materials to return include: [Devices, documents, access cards, files].

5.3 Certification (Optional). Upon request, a Party will certify destruction/return in writing.

6. Surviving Obligations

6.1 Survival. The following obligations survive termination (as applicable):

☐ Confidentiality

☐ Intellectual property ownership/licensing

☐ Payment obligations accrued before termination

☐ Indemnification

☐ Non-solicitation / Non-disparagement (if in Original Agreement)

☐ Dispute resolution / Governing law

☐ Other: [List specific sections]

7. Mutual Release (Optional)

7.1 Release. To the extent permitted by law, each Party releases the other from claims arising out of the Original Agreement through the Termination Date, except for obligations expressly stated to survive or amounts owed under Section 4.

7.2 Excluded Claims. Claims that cannot be waived by law are excluded.

8. No Admission

8.1 No Admission. This Termination Agreement is a compromise and does not constitute an admission of fault or liability by either Party.

9. Miscellaneous

9.1 Governing Law. This Termination Agreement is governed by the laws of [State/Country].

9.2 Entire Agreement. This Termination Agreement and the Original Agreement (to the extent surviving) are the entire understanding regarding termination.

9.3 Amendments. Amendments must be in writing and signed by both Parties.

9.4 Severability. If any provision is unenforceable, the remainder remains effective.

9.5 Electronic Signatures. Electronic signatures are effective.

Signatures

By signing below, the Parties agree to this Mutual Contract Termination Agreement as of the Effective Date.

Party A: [Full Legal Name]

Title/Role: [Title]

Date: [Date]

Signature: ___________________________

Party B: [Full Legal Name]

Title/Role: [Title]

Date: [Date]

Signature: ___________________________

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Reviewed July 2026 Free download, PDF & DOCX

What is a mutual contract termination agreement?

A Mutual Contract Termination Agreement is a written agreement where both parties agree to end an existing contract. It confirms the termination date, outlines any final payments or outstanding duties, and usually includes mutual releases to reduce the risk of future disputes.

When should you use a mutual termination agreement?

Use it when both sides want to end a contract early or formally close out a relationship — such as service agreements, vendor contracts, leases (in some cases), employment consulting arrangements, or partnership-type contracts. It helps ensure both parties agree on what remains to be done after termination.

What should the termination agreement include?

It should identify the original contract, state the termination date, list surviving obligations (confidentiality, IP, payment, non-solicitation), describe final invoices and refunds, require return or destruction of confidential information, and include releases and a “no admission” clause.

Does mutual termination cancel all obligations automatically?

Not always. Some obligations usually survive termination, like confidentiality, intellectual property provisions, non-solicitation, indemnities, and payment of amounts already due. This template includes a section to list surviving obligations clearly.

Should you include a release of claims?

Often yes, if you want a clean break. However, some claims cannot be waived depending on law (for example, certain employee rights). The release section is written in general terms and can be adjusted.

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