Kill fee / cancellation fee clauses, explained
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.
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.
Red flags
- Client may terminate for convenience with no payment beyond 'hours documented'
- All payments refundable on cancellation
- Kill fee only applies if the freelancer cancels
Suggested wording
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.
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Review my contractIs this normal in…
- Kill fee / cancellation fee in a design services agreement?
- Kill fee / cancellation fee in a copywriting & content agreement?
- Kill fee / cancellation fee in a video production agreement?
- Kill fee / cancellation fee in a marketing services agreement?
- Kill fee / cancellation fee in a consulting agreement?
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