Is kill fee / cancellation fee normal in a consulting agreement?

A consulting agreement should have a kill fee: if the client cancels for convenience you get paid for work done plus a percentage of what is left. A termination-for-convenience clause with no kill fee is one of the most expensive things a freelancer can sign.

What’s market-standard

Payment for all work performed to date plus a percentage (25-50%) of the remaining fee, or a defined percentage of the total fee depending on how far along the project is. Milestone payments already made are non-refundable.

Warning signs

• Client may terminate for convenience with no payment beyond 'hours documented'
• All payments refundable on cancellation
• Kill fee only applies if the freelancer cancels

Wording you can send

If the Client terminates for convenience, the Client shall pay (a) all fees for work performed through the termination date and (b) a cancellation fee equal to 40% of the remaining unpaid Project Fee. All amounts already paid are non-refundable.

What it means for you

What you are paid if the client cancels the project partway through for their own reasons. Without it, a client can walk after you have done 80% of the work and owe only for 'work completed', which is hard to prove.

Not legal advice. Gig Clause is software, not a law firm or a professional service, no attorney reviews, drafts, or is otherwise involved in anything it produces. It automatically highlights common contract issues and suggests negotiation language. Using it does not create an attorney-client relationship. For decisions with significant financial or legal consequences, consult a qualified attorney licensed in your jurisdiction. Clause standards vary by industry and location and change over time.