§ 15 of 15

Termination and disputes

The termination clause sets how the agreement can end before the term runs out: for a breach that is not cured, on notice for convenience, or when a price review fails. It also says what an early end costs. A contract you cannot leave when the buyer stops collecting is a contract written for the buyer.

Updated · Not legal advice

15.1

What are the usual grounds?

  • Breach not cured within a notice period, such as repeated missed pickups or late payment.
  • Convenience: either side may end on notice, sometimes with a fee.
  • Failed price review: the parties cannot agree a new price.
  • Insolvency of either side.
15.2

What do disputes look like?

In 2019 the operator of a Connecticut recycling facility sued the facility's owner, seeking to end their contract without penalty and recover damages, saying incoming contamination far above the contract's assumptions was costing it about $279,000 a month. Whatever the outcome, the case shows why the contamination threshold, how it is measured and the right to end the agreement should be written together.

15.3

What should a dispute clause say?

A short escalation: account managers, then senior managers within a set time, then mediation or the courts. Keep paying and collecting undisputed amounts and loads while it runs.

15.4

Sample wording

Illustrative wording to adapt. Brackets are choices to make.

15.1 Termination for cause. Either party may terminate on [30] days’ written notice if the other fails to cure a material breach within that period. Two or more missed pickups in any month is a material breach by Buyer.

15.2 No penalty. No termination fee is payable on termination under 15.1 by Seller.

15.5

What to negotiate

  • Name missed pickups and late payment as breaches.
  • Add an exit if a price review fails.
  • Limit early-termination fees to unrecovered equipment cost.

Red flags in a draft

  • Termination fees equal to the rebate you "would have" received.
  • Termination for cause available only to the buyer.
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Questions

Can I end a recycling contract early?
Only on the grounds the contract allows. Look for termination for uncured breach, missed pickups and failed price reviews, and check the fee.

Sources

  1. Republic files suit over Connecticut contamination, Resource Recycling, June 4, 2019.