Revisiting How to Express Termination with Prior Notice

I love it when after writing about a usage and describing it as awkward, I’m able to demonstrate that it’s not only awkward, it can also lead to fights. Today’s example of that is my December 2015 post about how to express termination with prior notice (here).

Today a reader emailed me as follows:

Suppose a termination provision of a contract reads, “After August 1, 2016, either party may terminate this Agreement, without cause, upon 180 days advance written notice to the other party.” Thus, would the earliest that a party is able to terminate the contract be:

(A) on August 1, 2016 (thereby providing the notice on February 3, 2016); or

(B) on January 28, 2017 (thereby providing the notice on August 1, 2016).

Interesting question! As discussed in my post, it’s conventional to refer to termination upon giving notice, which suggests that you’re terminating when you give notice. By that standard, under the provision cited by my reader you couldn’t terminate before you send the notice. On the other hand, as a matter of logic, termination doesn’t happen when you give notice—it happens 180 later. So I say it’s unclear what a court would say if it were called on to decide the earliest you could terminate.

This example involves awkwardness morphing into something that could lead to a dispute. Following the approach recommended in my December 2015 post would yield the following alternative:

If after [August 1, 2016,] [January 28, 2017,] either party notifies the other that it wants to terminate this agreement in accordance with this section X, this agreement will terminate at midnight at the end of the 180th day after the day the other party receives that notice.

It allows you to specify clearly which meaning you have in mind. No confusion, no possibility of a dispute.

About the author

Ken Adams is the leading authority on how to say clearly whatever you want to say in a contract. He’s author of A Manual of Style for Contract Drafting, and he offers online and in-person training around the world. He’s also chief content officer of LegalSifter, Inc., a company that combines artificial intelligence and expertise to assist with review of contracts.

6 thoughts on “Revisiting How to Express Termination with Prior Notice”

  1. I gave it a try and came up with this:

    Either party may terminate this agreement by so notifying the other party. To be effective, the notice must refer to this section X and state a termination point that is neither sooner than (time and date) nor sooner than midnight at the end of the 180th day after the other party receives the notice.

    This version (1) requires that the notice state a termination point, and (2) deletes the reference to wishing.

    • But your first sentence says essentially nothing.

      I’m still reluctant to say you’re terminating by giving notice, given that the contract doesn’t in fact terminate when notice is given.

      For the heck of it, I changed wishes to wants.

      • 1/ The first sentence says that each party may terminate by notice to the other, a power each would otherwise lack. How is that ‘essentially nothing’?

        2/ The ‘how’ of termination is not the same as the ‘when’. If a resignation letter says ‘I hereby resign effective at the close of business next Friday’, is the author not resigning ‘by letter’ because the resignation isn’t effective when the letter is delivered?

        3/ The point isn’t that ‘wants’ is a better word choice than ‘wishes’, but that a drafter has no reason to require that a termination notice mention the terminating party’s wants at all. What matters is what the terminating party is in fact doing — starting a countdown clock to termination. –Wright

  2. Like it. I use language similar to the following. More than one way to skin the cat, and I might like yours better than mine.

    Either party may terminate this Agreement by giving notice to the other party after [date]. Termination will be effective at midnight at the end of the latter of
    (i) the date set forth in the notice; or
    (ii) the 180th day after the date notice is effective.

    [Related topic: I sometimes use periods of that are multiples of 7 instead of multiples of 30, e.g., 28, 56, 91, or 182 days instead of 30, 60, 90 or 180. The idea is to help avoid mistakes for periods that go across the end of a month with 28, 29, or 30 days (e.g. the erroneous mental calculation that the 30th day after July 30 is August 30), and to make it more likely that the last day of the period will fall on a business day, or at least a weekday. I haven’t decided if it’s really an improvement or not; sometimes I think it might actually lead to more mistakes than it avoids, e.g., if people mentally register 28 days as being “one month” rather than “four weeks.” I also tend to use 14 days rather than 15 and almost always use 21 days rather than 20. I’m more confident those are better choices.]

  3. How about:

    A. Either party may terminate this agreement* by serving notice in writing to the other party.
    B. Such notice may be served [at any time] [on or after [date]] [no earlier than [date]].
    C. The agreement will terminate at [immediately upon] [x days after] service of the notice.

    *I’m not sure whether this ought to read “may indicate its desire to terminate this agreement”, given that termination does not necessarily occur upon service of notice.


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