Take the fee test
Clause

Termination and exit fees

The clause that says how either side can end the engagement, what is owed when it ends, and what happens to a claim in progress. It decides whether leaving is a notice period or a bill.

This page explains a common clause in general terms. It is not legal advice, and contract law differs between countries. Ask a lawyer to review your own engagement letter.

Sample clause

Written for this guide, not from any real contract

1 Either party may end this engagement by giving 30 days' written notice. 2 On termination the Client will pay for work completed up to the date of termination at the rates in Schedule 1, 3 and no other fee is payable. 4 Where a Claim prepared by us is filed within 12 months after termination, the Fee for that Claim remains payable in full. 5 We will return the Client's records and working papers within 14 days of a written request.

  1. The notice period, for both sides. Weeks is easy to live with; a period longer than three months is worth asking about.
  2. What you owe on ending: work actually done, at a rate you can see.
  3. No exit fee. A letter that charges "the balance of the minimum term" or a fixed sum on ending would say so here.
  4. The fee that survives. Read "prepared by us" and "filed" carefully: ask whether a claim you rebuild yourself is caught.
  5. Records back, with a date and no condition. Some letters add "on payment of all sums due".

What it means in plain English

This clause sets the price of leaving. In the sample, either side can end the engagement on a short written notice, you pay for work done up to that date and nothing else, your records come back on request, and one thing survives: if a claim the adviser prepared is filed within a year of ending, the fee for it is still due.

That last term is the one to read twice. It protects the adviser from a client who takes a finished claim to someone else to file for less. It can also attach a fee to a claim you had to rebuild from scratch. The difference is in the words: "prepared by us" and "filed" can each be read more than one way.

What to look for

A version that is easy to live with has a notice period measured in weeks, no minimum term that was not discussed, a plain statement that only work completed is payable, records and working papers returned without charge and within a set time, and a narrow rule for a claim in progress, such as a fee only where the adviser's work is actually used to file.

A version to ask more about has a notice period longer than three months, an exit fee that applies however the engagement ends, a fee on any claim filed after termination whether or not the adviser's work is used, records released only on payment, or a minimum term that appears in the terms but not in the proposal. A minimum term agreed openly in exchange for a lower fee can be fair; the question is whether you knew.

Contract law differs by country, and so does what a letter can and cannot do. Ask a lawyer to review your own letter before you sign it.

Questions to ask

KnowYourFees.org is published by Swanson Reed, an R&D tax advisory firm that competes with other advisers. This site does not recommend any adviser, including Swanson Reed.

© 2026 Swanson Reed. You may use the templates and checklists for your own business. Official material is used under the terms set by its publisher.