There are generally two responses you hear from janitorial contractors when asked their opinion on contracts with customers. Some people think contracts don’t matter. They say that when a customer wants to sever the relationship, there is nothing you can do. Others take a very contract-centered approach, assuming the account is only as secure as the terms of the contract. Well, there is certainly some truth in both approaches. When a customer wants out, they usually find a way to get out. Likewise, when they are being really well served, the terms of the agreement rarely matter.
But despite good intentions by both contractor and customer, there will inevitably come a time when good contract terms will be needed to shield both parties from harm. In my mind, there is no clause more important for the contractor than a well-written term/termination clause.
In the past, most janitorial contracts had termination clauses that required the customer or contractor to give the other party 30 days notice before terminating the agreement. Other than this written thirty-day notice, no other reason was needed. This essentially reduced every contract to a 30 day agreement, even if the term stated it was three or five years. When a customer can cancel at any time, there truly is no contract term.
To combat this situation, contractors need a robust termination clause that protects both the contractor and the customer. While I am not an attorney and this is not legal advice, I would recommend having a termination clause similar to this one.
Sample Term-Termination Clause
This Agreement shall remain in effect for a period of _____ years, with the term of service commencing on __________ and ending on ___________. This Agreement will automatically renew for additional one-year terms upon the same terms and conditions, unless either party to this Agreement provides written notice of its desire to terminate this Agreement within 60 days of the end of the then-current term or renewal term. Termination of this Agreement prior to expiration of the term can only be predicated on uncorrected service issues within the scope of services, as set forth herein. Prior to cancellation of services by the Client, Contractor must be notified in detail in writing of the issue and provided not less than fifteen (15) days to correct the issue. If the issue is not resolved, Client shall provide a 30-day written notice of cancellation before terminating the Agreement.
This contract clause protects the contractor from willy-nilly cancellations; however, it protects the customer from being stuck with subpar service. While we rarely would pursue legal action over a contract cancellation, this clause usually prevents those situations from ever arising.
In closing, I would recommend you speak with you attorney and consider a term/termination clause similar to the one above. Agreements should always be fair and protect both parties, and I am convinced the above terms help make that possible.
Don’t forget to check out our free sample contract here.