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Glossary

Termination for cause

Short answer

Termination for cause is the right to end a contract because the other party has materially breached it or another defined event has occurred, such as insolvency. Contracts usually require written notice and give the breaching party a cure period, commonly 30 days, before termination takes effect.

By Pactinel editorial teamReviewed on October 22, 2026

Cause-based termination is the standard exit for a broken contract. The clause sets out what counts as cause, what notice is needed, and what happens afterward.

Typical triggers

  • Material breach that is not cured within the cure period.
  • Non-payment after a reminder.
  • Insolvency, bankruptcy or similar proceedings.
  • Repeated service failures, for example missing an SLA several months in a row.
  • Breach of confidentiality, data protection or compliance obligations.
  • Prohibited change of control or assignment.

Example clause

"Either party may terminate this Agreement by written notice if the other party materially breaches it and fails to cure the breach within 30 days after receiving written notice describing the breach."

Process points

  1. Check the notice requirements in the notice clause.
  2. Describe the breach specifically and cite the clause.
  3. Allow the full cure period before terminating.
  4. Keep evidence of the breach and the notice.

Terminating without a valid cause can itself be a breach, exposing the terminating party to damages. Compare termination for convenience.

This is general information, not legal advice.