A termination clause is a provision in a contract that outlines the conditions under which the agreement can be ended by either party. This clause specifies the reasons for termination, such as breach of contract, failure to perform, or mutual consent. It helps protect the interests of both parties by providing clear guidelines on how to proceed if the relationship needs to be dissolved. These clauses can vary in complexity and may include notice periods, obligations upon termination, and any penalties for early termination. Understanding the specifics of a termination clause is essential for parties involved in contracts, such as businesses, employees, or service providers.