Termination of Service Clause

A termination clause is a section of a legal agreement (such as a Terms and Conditions agreement) that describes when an account can or will be terminated, such as when the agreed-upon terms are violated or if the user decides to discontinue the relationship (by stopping a subscription service, for example).

This type of clause can offer the parties involved in a contract a way to cancel the agreement without being penalized.

This article explains what a Termination of Service clause is, why you need one, how to write a Termination of Service clause, and where to display it.

What is a Terms and Conditions Agreement?

A Terms and Conditions agreement is a contract between your business and your users. It describes your business's rights and responsibilities and lays out the rights and responsibilities that your users agree to abide by in order to use your services.

Terms and Conditions agreements may also be called a Terms of Service (ToS), Terms of Use (ToU), or User Agreement. Regardless of the name, the details defined in the contract convey the same information.

Terms and Conditions should be personalized to your specific business, and can include any of the following clauses:

General Conditions/Introduction

General conditions clauses describe the guidelines your users agree to follow in exchange for use of your services. They tend to be the introduction to the agreement and are quite general in language.

Copyright and Intellectual Property/DMCA

This clause tells users that your content is your own and that it is not to be used elsewhere without express permission granted by your business.

The Digital Millennium Copyright Act (DMCA) helps handle when copyrighted material is used without permission. This clause tells the user your process for dealing with DMCA issues.

Products and Services

This clause depicts the products and services you offer, as well as freeing you from liability for any limitations or discrepancies when it comes to product function or availability.

Limitation of Liability

A Limitation of Liability clause helps protect your business from certain types of loss or unintentional damage by limiting your legal liability for certain things, and in the event that someone attempts to sue you.

User-Generated Content (UGC)

This clause tells users what kind of content they can share on your platform, as well as what the consequences are for sharing unapproved materials. You can also reserve ownership rights over UGC.

Payment and Subscription Information

This clause describes what kind of payment your business accepts, as well as how it is processed. If you offer a subscription service, it shows when and how often payments will come out of your users' accounts.

Governing Law and Dispute Resolution

Governing Law refers to whatever law has jurisdiction over your business. You can also use this space to link to a dispute resolution platform, if applicable.

Contact Information

It's important to include a way for users to contact you. You should include your business name, phone number, address, and email address.

Updates to the Agreement

This is where you can let users know that these clauses can be updated at will, and how you will inform users of those updates.

What is a Termination of Service Clause?

A Termination of Service clause is a provision within a legal agreement that explains the conditions in which you or your users can discontinue services. It describes the rights and responsibilities of each party and lets users know what they can expect after services have been terminated.

Common reasons for terminating services include:

• Breach of contract
• Non-performance (failure to fulfill agreed-upon services)
• Financial issues
• Changes in ownership, applicable laws, or economic conditions
• Force majeure events (unforeseen events such as natural disasters or terrorist attacks)
• Irreconcilable disputes

Why is a Termination Clause Important?

Implementing a Termination of Service clause within your legal agreements can help protect your business from potential legal disputes arising from ambiguous communication.

Other benefits of maintaining a Termination of Services clause include:

• Providing more control over your website, products, and/or services
• Enabling you to end a contract prematurely
• Clearly communicating each party's rights and responsibilities in regards to termination of services

Your Terms and Conditions agreement outlines everything your user needs to know in order to do business with you. If any party involved in the contract violates the agreed upon terms, it's essential to have a way to address that transgression and to provide a framework for ending the relationship.

Humana's Terms and Conditions includes a termination clause that tells users that it can cancel their accounts at its sole discretion, and informs users that they can unsubscribe at whim:

It reads:

Humana Community may terminate your access to any part or all of the Community and any related Community(s) at any time, with or without cause, with or without notice, effective immediately, for any reason whatsoever.
Humana Community may also terminate or suspend your account for inactivity, which is defined as failing to sign-in to the Community for an extended period of time, as determined by Humana Community time to time. The amount of time that Humana currently considers as an "extended" period of time is three months. Upon termination of the Community, your right to use the Community ceases immediately.
If you wish to terminate, you can discontinue the use of the community or members can unsubscribe from the membership.
Humana Community shall have no obligation to maintain any content in your account or to forward any unread or unsent messages to you or any third party.

While not legally required, a termination clause serves to communicate your standards and expectations for behavior to your users and to protect your business.

How to Write a Termination Clause

To write a termination clause, you will first need to determine what kind of user behavior is grounds for termination. What are the deal breakers that would make you want to immediately dissolve a relationship between you and your users?

You will then need to describe what exactly the process of termination entails. What can the user expect to happen both immediately upon termination, as well as in the future?

Finally, you will want to let your users know what responsibility they have for any payments owed or damages incurred.

You should include language in your termination clause that tells users that you retain the right to terminate any accounts that violate any part of the Terms and Conditions agreement.

Your Termination of Service clause should be clearly written, using language that is easy to understand (try to avoid legal or technical jargon as best you can).

Here's an example of a clause that lets users know that if they do not comply with the Terms and Conditions, they will automatically lose their rights as outlined in the agreement:

It reads:

c. Termination. This Standard EULA is effective until terminated by you or Licensor. Your rights under this Standard EULA will terminate automatically if you fail to comply with any of its terms.

You should let users know that your business retains the right to terminate accounts for any reason at all. It is important to include this section as, even if you have a lawyer write your termination clause for you, it is not possible to cover every possible scenario in which you might want or need to terminate a relationship with a user.

Let's look at each component in greater detail.

Grounds for Termination

Your Termination of Service clause should contain a clear description of your grounds for termination. Common reasons for terminating services include when you are legally required to do so or when users violate your terms.

eBay's Payments Terms of Use agreement details the scenarios in which it will terminate the agreement, including when legally required to do so, when a user is involved in an illegal activity, or when it can't verify a business's identity:

Vanguard's Terms and Conditions of Use agreement explains that it can terminate services without prior notification, at any time and for any reason:

Spotify's Terms of Use agreement states the reasons why it may terminate services, including for breach of terms or to comply with applicable laws:

Notification Period

This part of the Termination of Services clause describes any notification period that may apply during your termination of services process and circumstances in which users will not be notified prior to termination of services.

Dropbox's Terms of Service agreement explains that it will notify users if they are in breach of its Terms of Service before terminating or suspending their accounts, unless they have violated its Acceptable Use Policy, or if notifying users would be illegal or cause legal liability:

Taylor Swift's Terms of Use agreement states that users' accounts can be terminated at any time and without reason or notification:

Appeals and/or Dispute Resolution Process

Some laws require applicable businesses to offer users a method for resolving conflicts. This section of your Termination of Service clause can help you comply with applicable laws by providing information on how users can appeal your termination decision and/or initiate the dispute resolution process.

Google's Terms of Service agreement includes a link that users can click to learn how to appeal if their access to Google's services has been terminated:

When users click on the link, they are taken to Google's Your account is disabled page, where they can appeal its decision or learn about other dispute resolution options that may be available:

Similarly, Facebook's Terms of Service agreement contains a link that users can click to learn how they can contact it if they think their account has been mistakenly disabled:

When users click on the link, they are taken to Facebook's My personal Facebook account is disabled information page, which explains that it will send appeal instructions to anyone whose account has been disabled:

Obligations of Each Party After Termination

You should explain each party's rights and responsibilities once services have been terminated.

LinkedIn's User Agreement outlines both its and its users' obligations after the contract is terminated, including paying any money still owed:

The Termination clause in Reddit's User Agreement explains that certain sections of the agreement still apply after services have been terminated, including rules concerning users' content and governing law:

How a User Can Terminate an Account

Your termination clause can serve to let users know how they can discontinue their account with you. Using straightforward language, tell users the exact steps they need to take to cancel their account, as well as who they can contact if they have any questions about how to cancel it.

Spotify's termination clause tells users who they can contact in order to cancel their accounts, as well as where to find its contact info:

You should let users know what effect terminating an account will have. Users may lose access to stored data, or even to their own UGC. You will also want to let users know if there are any fees associated with canceling their account, or if they can expect any type of refund.

Buzzsprout tells its users that their content will be permanently deleted once an account is canceled:

Buzzsprout's termination clause reads:

Cancellation and Termination

1. You alone are responsible for the proper cancellation of your account. You may cancel your account at any time by clicking on My Account > Cancel Your Account links in the Service's navigation menu. This provides a simple link to cancel your account at any time. Email or phone requests to cancel your account will not be deemed cancellation.
2. Your account and all of its Content will be deleted immediately upon your cancellation of the Service. This information can NOT be recovered once it has been deleted.
3. You can cancel at any time, but you will remain liable for all charges accrued up to that time, including full monthly charges for the month which you discontinued service. You will not be charged again.
4. Higher Pixels reserves the right to modify, suspend, or terminate your account and refuse any and all current or future use of the Service for any reason at any time with or without notice or refund. Such termination of the Service will result in the deactivation or deletion of your Account or your access to your Account, and the forfeiture and relinquishment of all content in your account. Higher Pixels may refuse service to anyone for any reason at any time.

It's important to be clear with your users about the consequences of terminating their account with you.

Consequences of Termination

This part of your Termination of Service clause explains the effects of termination, such as loss of access to the service, legal action, and payment of any outstanding balances.

CAKE's Terms of Use agreement explains that users must stop using its services upon termination of the agreement, and pay any charges that are due:

Hulu's Subscriber Agreement lets users know that it may take legal action against anyone who violates its property rights or commits fraud and that users will lose access to its content upon termination of services:

Examples of Termination Clauses

Here's an example of a robust termination clause from OntraPort's Terms and Conditions agreement. It uses bullet points to break up different aspects of account termination, including what will happen to a user's content if an account is terminated, how refunds will be handled, and OntraPort's right to cancel any account at any time for any reason:

It reads:

Terminations

You are solely responsible for properly cancelling your account. We do not take cancellation requests via email, over the phone or chat. All accounts must be cancelled by the primary account holder through their account. See cancellation instructions here.

• All of your Content will be immediately deleted from the Service upon cancellation. This information can not be recovered once your account is cancelled.
• If you cancel the Service before the end of your current paid up month, your cancellation will take effect immediately and you will not be charged again.
• We have the right to suspend or terminate your account and refuse any and all current or future use of the Service, for any reason at any time. Such termination of the Service will result in the deactivation or deletion of your Account or your access to your Account and the forfeiture and relinquishment of all Content in your Account. We reserve the right to refuse service to anyone for any reason at any time.
• Certain offers allow for a refund of the base account fee if you cancel your account during your refund period (30 days from the date you began paying for your account). If this offer was made available to you, you must first cancel your account, then submit a request for a refund via email to [email protected]. Note that usage fees, including but not limited to email, contact and object record volume charges, user seats, postcards, SMS, set-up fees, custom programming, services and consulting fees, are not refundable. Additionally, annual subscriptions are non-refundable regardless of the effective date and are exempt from refund offers.

Most termination clauses contain two standard points:

1. Termination will occur if the terms of the Terms and Conditions agreement is violated, and
2. Termination can happen for any reason at the discretion of the business

The clause can also be specific and include things that you want to restrict your users from doing, i.e. not paying for a subscription plan.

Giving specifics like this can help a user understand what she/he is expected to refrain from doing if she/he wishes to keep his account in good standing.

However, it's impossible to list every single instance and action that may be cause for account termination, so reserving the right to terminate "at any time and for any reason at the discretion of the business" is beneficial as a safeguard to protect your website or mobile app against general or unforeseeable abuses and maintain full control over your service.

The following example clause includes the above points in its termination clause, and also lets users know that they can terminate the agreement themselves at any time by closing their accounts or by stopping use of the service:

It reads:

16. Termination of Service.

1. You may stop using the Service at any time by closing your Account, or ceasing to use the Service. In such event, you will not be entitled to any refund of any fees that you have paid prior to you ceasing to use the Service.

This clause then goes a step further and informs users what their rights and responsibilities will be in the event of a termination. Users are given 30 calendar days following the termination or suspension to access and export their data from the app.

If you have a SaaS app or other app that houses user data, you'll want to consider this and include a policy about how this data will be handled in the event that an account is terminated by you.

This will matter to users who are storing important data within your service:

It reads:

3. If your use of the Service is terminated or suspended pursuant to Sections 16.1 or 16.2 above, except to the extent prohibited by any applicable law, rule or regulation, you will have access to, and the ability to export, your Content for a period of thirty (30) calendar days following such termination or suspension. Fees will continue to be assessed based on your actual use of the Service during such period. Without limiting the foregoing, the rights set forth in this Section 16.3 are subject to your payment of any outstanding fees due upon and after termination of your use of the Service.

Intercom lets users know in its Terms of Service agreement that in the event of a termination, their right to use the Services, access the Website, and any Content will immediately cease:

There's no 30 day period here:

The termination clause in 500px's agreement is very broad and allows 500px to maintain the right to suspend any and all services on an account "immediately, without prior notice or liability, for any reason whatsoever, including without limitation if you breach the Terms."

The clause also addresses topics like how a user can terminate an account (in writing), and what will happen to the user's visual content (it will be removed within 180 days):

Here's an example of a termination clause that lets users know how they can terminate their subscriptions and accounts at any time via account settings or by sending a message through a contact form.

Users are informed that if they terminate a subscription, it will go into effect at the end of any subscription time period that has already been paid for:

It reads:

6. Termination of Services

You may request the termination of your Subscription at any time by canceling your account in the Subscription section of your Account Settings, or by sending a message through https://flickrhelp.com/hc/en-us/requests/new providing clear written notice of such request. When Flickr receives your termination request, Flickr will terminate your Subscription and notify you of such termination via email. Flickr may request additional information from you prior to terminating your Subscription. Your Subscription is not terminated until you receive confirmation of such termination from Flickr. If you terminate your Subscription, such termination will be effective at the end of any previously paid Subscription Term. By way of example and not in limitation of the foregoing, if you request the termination of your Subscription and you have two months remaining in your Subscription Term, such termination is effective at the end of the two months remaining in your Subscription Term and you will have access to the Flickr Pro Services for the remaining two months of such Subscription.

Flickr may terminate a Subscription, or any user's access to and use of the Flickr Pro Services, at any time for any reason at its sole discretion, which such termination will be effective immediately. If you violate the Terms of Use, Flickr at its sole discretion may (i) require you to remedy any violation thereof and/or (ii) take any other actions that Flickr deems appropriate to enforce its rights and pursue available remedies.

Apple's iCloud Terms agreement divides this clause into two sections, one for when users voluntarily terminate their accounts, and one for when Apple terminates accounts:

A termination clause exists mainly to allow you - the business, app, or SaaS owner - to be able to terminate a relationship with an abusive end user.

Here's an example of such a clause, from Omaha Steaks:

It reads as follows:

Termination of Use

OmahaSteaks.com may, in its sole discretion, terminate your account or your use of the Site at any time. You are personally liable for any orders that you place or charges that you incur prior to termination.

When writing your termination clause, include the following information for a thorough, informative clause:

• How a user can terminate her own account

• What will cause you to terminate an account

  • Examples:

    • "If Terms in this agreement are violated," and
    • "At our full discretion - for any reason and at any time"

• What will happen after termination of an account:

  • Will a user have access to user-generated content or data within a website account or app for a period of time, or will access immediately be denied and content immediately deleted?
  • Will any refunds be granted?

These points are a great place to start to maintain your right to terminate a user account at any time and to inform users enough about what they can expect with account termination.

Where Do You Place a Termination of Service Clause?

You should place your Termination of Service clause within any legal documents that describe the services you provide.

Common places to put a Termination of Clause service include:

• Terms and Conditions Agreement - A legal document that explains the rules that users must agree to in order to use your services (also referred to as Terms of Service, Terms of Use, or just Terms).
• User Agreement - Similar to a Terms and Conditions agreement, a User Agreement (also called an End User License Agreement or EULA) is a contract between a website or app and its users.
• Subscriber Agreement - A legal document that explains the conditions subscribers must consent to when using a subscription service.
• Contracts. Contracts help service providers and freelancers to protect their businesses and ensure that clients are on the same page.

You can see from the examples in previous chapters how these clauses can be in a variety of types of agreements, but here's one more example to bring home the point.

Xero's Terms of Use agreement includes a Termination clause that describes how users can end their subscription and its grounds for termination:

The Benefits of Using a Terms and Conditions Generator to Write Your Termination Clause

When you use a Terms and Conditions generator from a legitimate site, you receive a professional termination clause template that covers all of the circumstances that could be cause for termination, and thoroughly details the termination procedures.

It's important to be cautious about which Terms and Conditions generator you choose, and what kind of information you share. You want to make sure that you're not putting your data at risk by using a disreputable site.

With TermsFeed's Terms and Conditions Generator, all you need to do is input your business's information into a form and the generator creates a custom termination clause.

TermsFeed's Terms and Conditions Generator includes options for creating clauses for websites, mobile apps, ecommerce stores, and more.

You can also use a termination clause template to do the legal leg work for you.

The Benefits of Using a Termination Clause Template

With a termination clause template, all you have to do is fill in the blanks and you've got your very own termination clause.

TermsFeed offers a free sample Terms and Conditions template that can be edited to include your company's information. It includes a termination clause:

Summary

A Termination of Service clause is a section of a legal agreement that describes how you or your users can terminate services that were previously agreed upon. It outlines each party's rights and responsibilities surrounding termination of services.

Having a Termination of Service clause within your legal documents can provide legal protection if you dissolve an existing contract before services have been completed.

Other benefits of having a Termination of Service clause include:

• Giving you more control over your website, products, and services
• Protecting you if you discontinue services prematurely
• Managing users' expectations

There are a few elements your Termination of Service clause should contain, including:

• Grounds for termination
• Notification period
• Appeals/dispute resolution process
• Obligations of each party after termination of services
• Consequences of termination of services

You can put your Termination of Services clause within your legal documents, including Terms and Conditions agreements, User Agreements, Subscriber Agreements, and contracts.