LawDepot’s Service Agreement template helps you prepare for contract cancellations by including optional terms for notice periods and reimbursement.
A notice period is the time frame in which a party can send a cancellation letter and end the contract early. Notice periods typically range between 1 – 4 weeks, depending on the length of the contract. By requiring a notice period, you can ensure you're given enough time to wrap up your work and calculate any final fees.
Contractors may require clients to reimburse their work-related expenses and pay a portion of the total fees. For instance, clients may agree to reimburse expenses such as travel, accommodation, or specific supplies that the contractor bought to complete the contracted work.
You can also address a cancellation fee in the “Additional Clauses” section of the questionnaire. However, keep in mind that courts are unlikely to enforce an overly large fee (cancellation charge). You can research formulas for a cancellation fee based on your industry, the amount of notice provided, and lost profits.