Most IT founders forget this one contract clause.

At the start of any new project, there’s that exciting rush of optimism. You've got a clear plan, a client who gets your vision, and the thrill of diving into new work.

But after a few weeks, that initial buzz can start to fade. What was once crystal clear begins to blur into a confusing mess.

Deadlines that felt close suddenly seem far away, expectations shift, and the client goes quiet. If they do get back to you, it’s often with vague feedback or requests that just stretch things out.

Before long, you might find yourself stuck in an awkward situation.

This isn’t just about a project getting off to a rough start; it usually boils down to a pretty common mistake: you didn't include a clear exit strategy in your agreement.

The Reason This Issue Happens

Lots of agency owners focus on making sure deliverables are set, payment terms are clear, and the workflow is detailed, but they tend to forget about the termination clause.

Without a solid termination plan, you’re cornered. Your choices narrow down to either ditching the project and taking a financial hit or dragging things out without a clear way out.

It’s tempting to think that being flexible is the way to go, but the truth is, you need a clear exit strategy when things go south.

This is why having a solid termination process in your contract is important. It's your safety net, so you can step away gracefully if things get messy without risking your whole operation.

When things get tough, it’s your contractual protections that will really count, not just your good intentions.

My 7-Step Plan To Build An Exit Plan

To help you set up a strong termination process in your agreements, here are some of my helpful tips:

1) Outline Termination Reasons  

Start by listing all the situations that would allow either side to end the contract.

This could include non-payment, ongoing delays, lack of communication, or any breaches of the initial agreement. Clear definitions help eliminate any confusion about your rights.

2) Set Notice Periods

Agree on a reasonable notice period before termination kicks in - this could be a week, two weeks, or even a month. This gives both sides a chance to sort out minor issues or get ready for a smooth exit.

3) Payment and Handover Terms

Make sure it’s clear that you’ll be compensated for any work done up until termination, even if the entire project isn’t completed.

Also, lay out how to handle any work done to avoid being left chasing after payments or losing access to your own work.

4) Protect Your Time and Money

Include a clause allowing either party to terminate without needing to prove a breach while still ensuring payment for any completed work.

Also, make sure any unpaid invoices must be settled before you hand over any deliverables.

5) List Deliverables Upon Exit

Create a detailed checklist of what you’ll transfer when the contract ends - things like source codes, design files, and documentation, depending on payments received - so there’s no confusion later.

6) Cover Out-of-Pocket Costs

Include reimbursement for any approved expenses or third-party fees that came up before termination to avoid unexpected costs.

7) Have Clear Dispute Resolution Steps

Set up a clear process for resolving disputes, like mediation or arbitration, so you can avoid long and costly court battles if issues pop up between you and the client.

Final Thoughts

Before jumping into your next project, take a good, hard look at your contracts.

If the termination clause is lacking, prioritize adding it. It’s not just about knowing how to end a project; it’s about protecting your journey as a founder every step of the way.