Termination for cause
A contract clause allowing one party to terminate the agreement when the other party materially breaches it. Typically paired with a notice period and a cure window. Healthy contracts have both 'termination for cause' AND 'termination for convenience' clauses, each with reasonable triggers.
Termination for cause is the contractual right to end the agreement when the other party fails to perform — typically when they materially breach a specific obligation.
A well-drafted termination clause has three components:
- The trigger — what counts as "material breach"? Specific is better than vague. "Failure to deliver by the agreed milestone" is enforceable; "unsatisfactory performance" is not.
- Notice period — how much warning the breaching party gets. 30 days is common; 7 days for serious breaches.
- Cure window — the time the breaching party has to fix the problem before termination takes effect. This protects both sides from accidental termination over fixable issues.
Compare with adjacent concepts:
- Termination for convenience — either party can end the contract without a specific cause, usually with a longer notice period (60-90 days). A balanced contract typically allows convenience termination by both parties; an unbalanced one allows only the counterparty to terminate "for any reason".
- Termination for cause vs termination for default — sometimes used interchangeably. "Cause" is broader and includes things like bankruptcy or change of control.
Asymmetric termination is one of the clearest signs of a counterparty-favored contract. If only the counterparty can terminate without notice while you need 90 days, this is a clause to renegotiate before signing.
For employment contracts in Thailand, statutory severance requirements override most termination-for-convenience language — but explicit termination-for-cause clauses still matter for documenting the trigger if a dispute arises.