Contract Clause Library
Kill fee clause
Guarantees a minimum payment to the agency if a project is cancelled or a deliverable is rejected before completion.
A kill fee protects an agency's time investment if a client cancels a project partway through or rejects a deliverable outright rather than requesting revisions — common in creative work like copywriting, design concepts, or campaign development, where a client might simply decide not to use the work. It's typically a percentage of the total fee, scaled to how far the work had progressed.
Sample wording
Sample language (illustrative, not legal advice)
If Client cancels this engagement or rejects the delivered concept without requesting revisions under the Acceptance Testing clause, Client will pay Vendor a kill fee equal to 50% of the total project fee if cancellation occurs before delivery of the first draft, or 100% if cancellation occurs after.
Red flags
- No kill fee at all in engagements where a client could plausibly reject work outright rather than iterate on it
- A kill fee percentage low enough that it doesn't meaningfully compensate for work already done
- Ambiguity about whether a request for revisions still triggers the kill fee, versus only an outright rejection
How MarginFlow reads it
MarginFlow extracts the fee percentage tied to each cancellation stage, so if a project is cancelled or a deliverable is flatly rejected, the applicable kill fee amount is immediately available rather than requiring a manual re-read of the contract during what's often an already tense conversation.