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Termination

Kill Fee (Cancellation)

Compensates you if the client cancels after work has started but before the project is finished.

When to use it: Use on any fixed-scope project where a mid-project cancellation would leave you unpaid for real work done.

The clause

Cancellation / Kill Fee. If the Client cancels the project after work has
begun, the Client shall pay a kill fee based on the stage of completion:
twenty-five percent (25%) of the total project fee if cancelled within the
first [week]; fifty percent (50%) if cancelled after substantial work has
begun; and one hundred percent (100%) if the work is substantially complete.
Any deposit already paid is credited against the kill fee. All work completed
to the point of cancellation remains the property of the Contractor until the
kill fee is paid.

Replace anything in [brackets] with your own details before using.

Why this clause matters

Cancellations happen — a client's budget gets cut, priorities shift, a stakeholder leaves. A kill fee means a cancellation doesn't erase the hours you've already spent, and the tiered structure keeps the charge proportional to how far along the work is.

How to use it

  • Set your tiers. The template uses 25% / 50% / 100%. Adjust the percentages and the [week] threshold to fit your typical project length.
  • Define "substantial." For clarity, tie each tier to a concrete milestone (e.g. "after the first draft is delivered") rather than a vague judgment of progress.
  • Credit the deposit. The clause credits any deposit against the kill fee so the client isn't double-charged.

Related terms to pair it with

Pair with a deposit clause so early-stage cancellations are already partly covered, and an IP transfer on payment clause so cancelled work doesn't walk out the door unpaid.

This is a general template for information only, not legal advice. Have a qualified professional review your contract before you rely on it.

A kill fee covers cancelled work. FileDue covers completed work — deliverables stay locked until the client pays for what you finished.

See how FileDue works →

Related clauses

Deposit Required Before Work BeginsRequires an upfront deposit before any work starts, so you're never fully exposed at the beginning of a project.Late Payment FeeAdds a monthly charge to overdue invoices so paying you on time is cheaper than paying you late.