These 4 clauses will help you avoid messy surprises in IT projects

Most team problems don’t kick off with a big conflict. They usually start with just putting up with stuff. Like keeping someone around because you think they might get better, or hoping that some tension will just fix itself.

But here’s the deal: the most talented people pick up on things first. They start to adjust, disengage, and then they quietly slip away.

Letting someone go is tough, no doubt. But dragging it out is way worse - especially for your team culture and your star players.

Employee rights are crucial, and they should be. That’s exactly why having clarity is so important, too. Clear roles, clear expectations, and clear exit strategies.

Contracts shouldn’t be about control; they’re about fairness if things go south.

This is where a lot of IT founders can get thrown off. When you’re running an IT services business - like building apps or websites - you’re not just managing your team vibe.

You also have to deliver results under pressure, deal with changing requirements, and navigate tricky human behavior on both sides.

Unresolved issues don’t just stay within your team; they can mess with deadlines, client relationships, and even revenue.

As an IT founder, you’re stuck in the messy middle between your team doing the work and clients who might not always be reliable or who may push boundaries.

The same idea applies to both sides: setting clear expectations from the start helps prevent issues later on. That’s why you need good exit rules in two places: in your employee agreements and your client service contracts.

Here are four practical exit clauses every IT founder should consider adding in.

4 Clauses Every IT Contract Requires

1) Clear Termination For Cause

For both employees and clients, define what “for cause” actually means so you’re not arguing about it later.

• For employees:

  • Gross misconduct, repeated performance failures after written warnings, data/security breach, harassment, fraud.

• For clients:

  • Non-payment beyond X days, abusive conduct with your team, repeated scope changes without approval, or violation of your IP or code license.

Actionable line to add:

“Either party may terminate this Agreement for cause with immediate effect if the other party commits a material breach (including but not limited to non-payment, data/security breach, harassment, or fraud) and fails to cure within 7–15 days of written notice.”

2) Notice Period And Handover Rules

Exit is messy when there’s no timeline or handover process.

• For employees:

  • Notice period (e.g., 30 days) + what they must hand over: code, credentials, documentation, ongoing tasks.

• For clients:

  • If you exit, you’ll (a) finish defined milestone, or (b) stop work on a specific date and hand over all completed assets till then.

Actionable line to add:

“Upon termination, the exiting party will provide a handover for all ongoing work, including access credentials, source files, and documentation, for a period of up to 10 business days.”

3) Payment On Exit (What’s Owed, What’s Refunded)

This is where most fights happen.

• For employees:

  • Clear last working day, notice buyout rules, unpaid salary, expenses, and variable pay policy.

• For clients:

  • If they terminate, they pay for work completed + any non-refundable costs (hosting, tools, third-party licenses).

  • If you terminate, clarify whether any unearned advance is refundable.

Actionable line to add:

“In case of termination, the client shall pay for all work performed up to the termination date, based on approved milestones or time logs. Any remaining unearned advance may be refunded or credited at the company’s discretion, after deducting non-refundable third‑party costs.”

4) Post-Exit Access, IP, And Support

After exit, who owns what, and who is responsible for what?

• IP:

  • Usually, client owns the final deliverable once paid in full; you retain rights to internal libraries, frameworks, and generic components.

• Access:

  • After handover, you are not responsible for what they or their next developer do.

• Optional support:

  • If they want future help, it should be under a new maintenance/AMC contract, not an unwritten expectation.

Final Thoughts

If you include these four things in your contracts - termination for cause, notice and handover, payment rules when someone leaves, and clear terms on post-exit IP/support - you’re not being mean.

You’re just being fair. Fair to your team, your clients, and the company you’re looking out for.