Definition of Termination clause:
A termination clause is a section of a swap contract that describes the procedures and remedies for one of the counterparties if the other counterparty defaults or otherwise ends the contract. This includes, but is not necessarily limited to, the payment of damages to the injured counterparty. When a swap terminates early, both parties will cease making the contractually agreed-upon payments.
A termination clause may also be included in an employment contract. It defines the employee's rights in terms of receiving notice of termination, severence, or pay in lieu of notice.
Provision in a contract which allows for its termination under specified circumstances. Also called termination provision.
How to use Termination clause in a sentence?
- Termination clauses can be customized, but a standard clause is included in a master swap agreement.
- A termination clause may also be included in an employment contract, and defines the employee's rights to notice and pay in regards to the termination.
- A termination clause defines under what conditions a swap agreement can be terminated, as well as defines provisions for damages as a result of the termination.
Meaning of Termination clause & Termination clause Definition