Q&As

Are remedies and termination clauses separate rights under a contract?

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Published on LexisPSL on 20/09/2018

The following Commercial Q&A provides comprehensive and up to date legal information covering:

  • Are remedies and termination clauses separate rights under a contract?
  • Contractual clauses—termination
  • Contractual clauses—remedies
  • Remedies in general

Contractual clauses—termination

A contractual termination clause provides either or both parties with the right to terminate a contract under a defined set of circumstances. Such circumstances may be broadly or narrowly defined and may include either fault and/or non-fault based triggers. For an example of a termination clause, see Precedent: Termination clause and Drafting Notes.

Whether a termination right also constitutes a ‘remedy’ depends upon whether such right to terminate (and the consequences of exercising that right) does in fact provide relief or remedy to an afflicted party, the language of the particular contract and the circumstances under which a party may exercise its right to terminate. When considering exercising a right under a termination clause, any clause setting out the ‘consequences of termination’ should also be closely scrutinised. For example, see clauses 18.6 and 18.7 in Precedent: Framework services agreement—single contract with call-off orders—pro-supplier. See also Practice No

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