Kill Fee Clauses: The Fair Way to Handle Client Cancellations

Freelance projects get cancelled. Budgets change. Priorities shift. Sometimes the client simply disappears.

If your contract does not address cancellation fairly, you can end up doing a week of work and getting paid nothing.

What a Kill Fee Is

A kill fee is compensation owed if a project is terminated early.

It is not a penalty. It is a way to pay for: - time already spent - reserved availability - opportunity cost

A Simple Kill Fee Structure That Works

Here is an easy structure many clients accept:

• If the client cancels before work begins: refund minus admin fee.
• If the client cancels after work begins: pay for work completed plus a fixed percentage (10% to 25%) of remaining fees.
• If the client cancels late in the project: full remaining milestone is due.

Red Flags

1. "Terminate for convenience" with no payment

If they can terminate anytime and pay nothing, you are funding their uncertainty.

2. "Work product belongs to client" even if you are not paid

Never hand over final deliverables without clear payment terms.

What to Negotiate

• Tie deliverables to milestones.
• Include a kill fee that increases as the project progresses.
• Require payment before transfer of final files or source.

Quick Answers (AEO)

What is a fair kill fee percentage?

Often 10% to 25% of remaining fees, plus payment for work completed.

Should a client get unfinished work if they cancel?

Only if they pay for it. Otherwise, you are giving away your time.

If you are unsure how your termination clause behaves, paste it into Clauze and Clauze reads what happens if the client cancels tomorrow.