A JDA sets forth terms for collaborative product or technology development, addressing ownership, confidentiality, and IP outcomes. This playbook highlights best practices for defining contributions, milestones, and dispute resolution.
Why This Matters: Effective termination clauses ensure underperforming agreements can be ended cleanly and help manage post-termination obligations, limiting liability and uncertainty.
Negotiation strategy
If you're the Company A:
Negotiate for clear termination rights to avoid being locked into unfavorable terms. Ensure the inclusion of a strategic exit clause to allow flexibility in business decisions.
If you're the Company B:
Seek to limit termination rights to protect ongoing revenue streams. Propose longer notice periods for termination to allow for operational adjustments.
Essential elements
1
Term of Agreement
Defines the agreement's duration.
2
Renewal Mechanics
Outlines automatic renewal terms.
3
Termination for Cause
Allows termination for breaches.
Action framework
ACCEPT
Propose edits if the termination terms are too restrictive or lack clarity on renewal mechanics.
EDIT
Reject clauses that impose excessive penalties or lack a cure period for breaches.
ADD
Add language to cover strategic exits and ensure post-termination obligations are clear.
PRO TIP
Always ensure termination clauses align with your strategic business goals and provide sufficient flexibility.
Example clauses
FAVORABLE
Preferred Termination Clause
"The term of this Agreement shall commence on the Effective Date and shall continue for a period of [insert duration], unless earlier terminated in accordance with the provisions of this Agreement."
NEUTRAL
Standard Renewal Clause
"Upon expiration of the initial term, this Agreement shall automatically renew for successive [insert duration] periods unless either party provides written notice of non-renewal to the other party at least [insert number] days prior to the expiration of the then-current term."
UNFAVORABLE
Restrictive Termination Clause
"Termination is only allowed upon mutual agreement, with no provisions for unilateral termination."
Fallbacks
High-Risk Projects
In high-risk projects, ensure termination clauses allow for quick exits to mitigate potential losses and liabilities.
Long-Term Partnerships
For long-term partnerships, focus on renewal mechanics that provide stability while allowing for periodic reviews.
Technology Agreements
In technology agreements, include specific termination rights related to performance metrics and service levels.
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WEEK 1
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WEEK 2
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WEEK 3
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Your team builds initial playbooks, reviews existing clause libraries, and trains the DocJuris agent to align with your internal standards and negotiation positions.
WEEK 4
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