Contract Termination By Agreement for Malaysia

Contract Termination By Agreement Template for Malaysia

A Contract Termination by Agreement is a formal legal document used in Malaysia to mutually and amicably end an existing contractual relationship between two or more parties. The document is governed by Malaysian law, particularly the Contracts Act 1950, and sets out the terms and conditions for terminating the original contract, including the effective date of termination, settlement of outstanding obligations, mutual releases, and any surviving obligations. It provides a clear framework for winding down the contractual relationship while protecting the interests of all parties involved.

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What is a Contract Termination By Agreement?

The Contract Termination by Agreement is essential in Malaysian business practice when parties wish to formally end their contractual obligations by mutual consent. This document type is commonly used when business circumstances change, strategic priorities shift, or parties simply agree that their contractual relationship should come to an end. It's governed by Malaysian law, particularly the Contracts Act 1950, and can be used across various industries and contract types. The agreement typically includes provisions for the termination date, settlement of accounts, return of property, confidentiality obligations, and mutual releases. It's particularly important in maintaining business relationships while providing legal certainty and protection for all parties involved. The document should be customized based on the original contract's complexity and the specific requirements of the termination arrangement.

What sections should be included in a Contract Termination By Agreement?

1. Parties: Identification of all parties to the termination agreement, including their full legal names, registration numbers, and registered addresses

2. Background: Recitals describing the original contract, its key terms, and the parties' mutual desire to terminate the contract

3. Definitions: Definitions of key terms used in the termination agreement, including reference to defined terms in the original contract where applicable

4. Termination: Clear statement of the mutual agreement to terminate and the effective date of termination

5. Outstanding Obligations: Details of any payments, deliverables, or other obligations that must be fulfilled before or after termination

6. Mutual Release: Provisions for mutual release from future obligations under the original contract, subject to any surviving provisions

7. Confidentiality: Confirmation that confidentiality obligations from the original agreement continue to apply post-termination

8. Return of Property: Requirements for the return or destruction of any confidential information, materials, or property

9. Governing Law: Confirmation that Malaysian law governs the termination agreement

10. Execution: Signature blocks and execution formalities

What sections are optional to include in a Contract Termination By Agreement?

1. Surviving Provisions: Specific listing of provisions from the original contract that will survive termination - include when certain obligations need to continue

2. Settlement of Disputes: Include when there are existing disputes that need to be resolved as part of the termination

3. Non-Disparagement: Include for high-profile or sensitive terminations where reputation management is important

4. Tax Provisions: Include when the termination involves significant financial settlements or tax implications

5. Employee Matters: Include when the termination affects employment relationships or requires transfer of employees

6. Intellectual Property Rights: Include when the original contract involved IP rights that need to be addressed post-termination

7. Public Announcements: Include for terminations involving public companies or requiring market announcements

What schedules should be included in a Contract Termination By Agreement?

1. Schedule 1 - Original Contract: Copy or details of the contract being terminated

2. Schedule 2 - Outstanding Payments: Detailed list of any outstanding payments or financial settlements

3. Schedule 3 - Handover Plan: Timeline and process for transitioning any services or responsibilities

4. Schedule 4 - Assets Register: List of assets to be returned or transferred between parties

5. Appendix A - Release Form: Standard form for mutual release of claims

6. Appendix B - Compliance Certificate: Form confirming completion of termination obligations

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Malaysia

Publisher

Genie AI

Cost

Free to use
Relevant Industries

Manufacturing

Technology

Financial Services

Real Estate

Construction

Healthcare

Education

Retail

Telecommunications

Professional Services

Energy

Transportation

Agriculture

Mining

Hospitality

Relevant Teams

Legal

Procurement

Commercial

Finance

Operations

Compliance

Risk Management

Business Development

Corporate Secretarial

Executive Leadership

Contract Administration

Relevant Roles

Legal Counsel

Contract Manager

Chief Legal Officer

Business Development Manager

Commercial Director

Chief Executive Officer

Chief Financial Officer

Procurement Manager

Project Manager

Operations Director

Risk Manager

Compliance Officer

Company Secretary

General Manager

Managing Director

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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