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Mutual Termination Agreement

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Mutual Termination Agreement

Mutual Termination Agreement Template


This Mutual Termination Agreement (“Agreement”) is made on [Date], by and between:

Party A: [Full Legal Name / Company Name]
Address: [Address]
Contact: [Phone, Email]

Party B: [Full Legal Name / Company Name]
Address: [Address]
Contact: [Phone, Email]

Together referred to as the “Parties.”


1. Background

The Parties entered into a contract titled “[Original Agreement Name]” dated [Original Agreement Date] (the “Original Agreement”). The Parties now wish to terminate the Original Agreement under the terms set forth below.


2. Termination of Agreement

Effective [Termination Date], the Original Agreement shall be terminated and have no further force or effect, except as expressly provided herein.


3. Settlement of Obligations

  • Party A shall pay to Party B: $[Amount] (if applicable).

  • Party B shall return to Party A: [Assets, documents, or property].

  • Both Parties agree that all outstanding invoices up to the Termination Date shall be settled within [X days].


4. Release of Claims

Each Party hereby releases the other from any claims, demands, or causes of action arising out of the Original Agreement, except for obligations that expressly survive termination.


5. Surviving Provisions

The following provisions of the Original Agreement shall survive termination:

  • Confidentiality obligations

  • Indemnification clauses

  • Dispute resolution provisions

  • [Other specified obligations]


6. Confidentiality

Both Parties agree to maintain the confidentiality of any proprietary information obtained under the Original Agreement, even after termination.


7. Governing Law

This Agreement shall be governed by and construed in accordance with the laws of [State/Country].


8. Entire Agreement

This document constitutes the entire understanding of the Parties regarding termination and supersedes all prior communications.


Signatures

Party A: ____________________________ Date: _________
Name/Title: _________________________________________

Party B: ____________________________ Date: _________
Name/Title: _________________________________________

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Mutual Termination Agreement

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MUTUAL TERMINATION AGREEMENT FAQ


What is a Mutual Termination Agreement?

A Mutual Termination Agreement is a legal document that ends an existing contract by mutual consent of both parties, releasing them from further obligations while often addressing issues like payments, liabilities, and confidentiality.


Why is a Mutual Termination Agreement important?

It prevents disputes by providing a written record of termination terms. It also ensures clarity on outstanding obligations such as payments, asset returns, or confidentiality, protecting both parties from future claims.


When should you use a Mutual Termination Agreement?

Use it when both parties agree to discontinue a contract before its natural expiration—whether due to business changes, non-performance, or shifting priorities.


What should a Mutual Termination Agreement include?

It should identify the original contract, termination date, obligations that survive termination (such as confidentiality or indemnities), settlement of payments, and a release of claims.


Does a Mutual Termination Agreement erase all prior obligations?

Not necessarily. Many agreements preserve certain obligations—such as non-disclosure, indemnities, or dispute resolution—even after termination. The agreement should specify which obligations survive.


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