Everyone knows about the termination fee you must pay to your cell phone carrier if you decide to terminate early. Interestingly, there are plenty of service providers out there that do not provide a termination clause for convenience. What this simply means is that unless there is a breach in the term and termination provisions or a well defined mutual termination clause you are stuck with the terms of that contract for the duration of the term. A typical example would be a lease. You also need to be aware of the prior notice you need to provide to terminate the contract under its normal term. For example, you must give sixty days advance written notice prior to the end of the initial term. This is important because lots of agreements provide for automatic renewal.
The good news is that most service providers will negotiate a termination fee if they think you are unlikely to pay or if you are well into the term of the agreement (say half way or more). Note: I am not a lawyer so get qualified advice before doing this, but my general approach has two steps. First, let the other party know that you want out and are aware there is no clause for convenience. They’ll generally tell you they aren’t inclined to let you out. The key is to not offer you are willing to settle via a termination fee. Finally, follow up and suggest a termination fee if they did not suggest one previously. Do not state an amount you are willing to pay. Let them come up with a number and, if it’s reasonable, write up the paper work, execute and pay the fee. If they ask you for an amount you’d be willing to pay, use the opposite strategy you would in an interview–namely, low ball them and then negotiate if need be.
Most of these agreements were written specifically so that you are bound to the term of the agreement. The reality is that this kind of settlement is negotiated and consummated all the time. Of course, you could choose simply to not pay, but I suspect you like nasty letters from lawyers about as much as I do.
Sometimes it works, sometimes it doesn’t, but it’s a pretty solid approach if you really need an exit.
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