Kill fee / cancellation fee clauses, explained

What you are paid if the client cancels the project partway through for their own reasons. Without it, a client can walk after you have done 80% of the work and owe only for 'work completed', which is hard to prove.

Market standard

Payment for all work performed to date plus a percentage (25-50%) of the remaining fee, or a defined percentage of the total fee depending on how far along the project is. Milestone payments already made are non-refundable.

Red flags

Suggested wording

If the Client terminates for convenience, the Client shall pay (a) all fees for work performed through the termination date and (b) a cancellation fee equal to 40% of the remaining unpaid Project Fee. All amounts already paid are non-refundable.

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Kill fee / cancellation fee clauses, explained · Gig Clause