Kill Fee
Also called: Cancellation Fee · Early Termination Fee
A kill fee is compensation payable to a supplier when a client cancels a project before completion. It typically takes the form of a forfeited advance, a percentage of the remaining contract value, or payment for work completed to the cancellation date.
In more detail
Kill fees exist because project-based suppliers commit capacity in advance. A freelancer who reserves six weeks for a project and loses it in week two cannot usually backfill that time, so cancellation transfers a real cost that the fee is meant to address.
The three common structures distribute risk differently. Forfeiting the advance is simplest but may under-compensate late-stage cancellation. A percentage of remaining value is predictable. Payment for work completed is fairest in principle but requires credible time records.
For a kill fee to be reliable, the contract should also define what counts as cancellation — including a client who simply stops responding, which is the more common real-world scenario than a formal termination notice.
What our lawyers check
- Whether a kill fee exists at all — many freelance contracts omit it entirely
- Which structure is used and whether it matches how you actually work
- Whether client inactivity or indefinite delay counts as cancellation
- How it interacts with the payment schedule and any advance already received
Contracts where this clause matters
Related terms
This definition is general information about commercial contracting practice, not legal advice. How a clause operates depends on the specific wording of your agreement and the law that governs it. For advice on your contract, have it reviewed by a lawyer.
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