Determination or Forfeiture Clauses

Abstract

This chapter deals with forfeiture clauses, which are designed to provide a contractually regulated early end to the obligations of the parties under the contract. It explains how a forfeiture clause may allow determination for cause or determination without cause. It also points out that a forfeiture clause will not exclude common law rights to terminate and subsist in parallel to the forfeiture clause. This chapter assesses the standard forms of contract that often refer to forfeiture clauses as termination clauses and sometimes use the language of rescission. It defines rescission as the unwinding of a contract back to the point of its inception.