ContractShield

What Is a Kill Fee — and Why Your Freelance Contract Needs One

K05medium severitya clause to check for
The short version

A clause letting the client "terminate at any time for any reason" with no payment for work already done means they can cancel the day before delivery — you eat 100% of the sunk cost. A kill fee pays for completed work plus a percentage of the remaining contract value.

Why this clause bites

A clause letting the client "terminate at any time for any reason" with no payment for work already done lets them cancel the day before delivery. You eat 100% of the sunk cost.

The wording to look for

Illustrative wording — if your contract says anything close to this, the trap is live. The dangerous phrases are highlighted:

Either party may terminate this Agreement at any time, for any reason or no reason, upon written notice to the other party.

Highlighted phrases are the ones that create the risk — trade them out with the fix below.

The standard fix — send this back

Add: "If Client terminates for convenience, Client shall pay for all work completed to date, plus 25% of the remaining contract value."

Written to be forwarded to the client directly — polite, professional, and sourced (see below).

Questions freelancers ask

What's a typical kill-fee structure?

Common structures pay for all completed work plus 25–50% of the remaining contract value. The exact split is negotiable — the point is that cancellation has a price.

Is termination-for-convenience common in client contracts?

Yes — it's boilerplate in many standard agreements, which is precisely why a kill fee needs to be negotiated in, not assumed.

Source reference: Nolo — Termination clauses; freelancer union guidance on kill fees

Every finding in a ContractShield report cites the same public resource this guide is based on — verify it yourself before you act on it.

Related contract traps

Check your own contract for this trap

Paste your client's contract into the scanner — in 60 seconds you'll see every one of these traps that's actually in it. First scan free, no account needed.

Scan a contract free →

Educational content only — not legal advice, and it creates no attorney–client relationship. For anything material to you, consult a licensed attorney in your state.