{"id":208571,"date":"2021-07-26T17:56:04","date_gmt":"2021-07-26T04:56:04","guid":{"rendered":"https:\/\/legalvision.co.nz\/?p=208571"},"modified":"2025-08-22T16:02:48","modified_gmt":"2025-08-22T03:02:48","slug":"early-termination-fee","status":"publish","type":"post","link":"https:\/\/legalvision.co.nz\/commercial-contracts\/early-termination-fee\/","title":{"rendered":"Can I Charge an Early Termination Fee for a Fixed Contract in NZ?"},"content":{"rendered":"\n

Most contracts in New Zealand will continue for a fixed term. This means that as long as the contract is in place, it will continue to have a binding legal effect until the end of that period. At the end of that period, the parties may agree to renew the contract, or the contract will be over, and both parties will be free of any continuing obligations.\u00a0 In some situations, your contracting party may want to\u00a0get out of the contract early<\/a>. This could cause you to incur a loss as the contract is finishing earlier than you expected. Some contracts foresee this risk and include an early termination fee to cover any loss that may be incurred as a result of such termination. This article will outline when you can charge an early termination fee and how it might impact your contracts.<\/p>\n\n\n\n

What is an Early Termination Fee?<\/h2>\n\n\n\n

As the name suggests, an early termination fee<\/a> is a levy charged to a party who wishes to cancel a contract before the agreed expiry date. There are many reasons why somebody might want to terminate a contract, including finding a new contract with another party or not needing the contract. The purpose of an early termination fee is to compensate a contracting party for any loss they have incurred by the early termination. <\/p>\n\n\n\n

What is a Fixed Contract?<\/h2>\n\n\n\n

A fixed contract<\/a> is a type of contract that has a set end date, which is agreed upon by the parties when the contract is formed. For example, a commercial lease agreement may have a nine-year lease attached to it.<\/p>\n\n\n\n\n\n Continue reading this article below the form\n <\/i>\n<\/a>\n

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