cancellation clause


Also found in: Dictionary.

cancellation clause

A clause in a contract or lease that allows one or either party to cancel it upon the happening of certain named events other than a default.It is most often encountered:(1) in the lease for a single-tenant commercial building or house, allowing the landlord to cancel the lease upon sale to another owner who wishes to occupy the property rather than use it as an investment, and (2) in a commercial lease for a small-space user who might stand in the way of expansion by a larger tenant.Well-negotiated leases include a provision for some sort of compensation to the tenant if this happens.

References in periodicals archive ?
Adding a cancellation clause to your contract is one way to protect yourself, Tenenbaum said.
However, the landlord advices that as there is no cancellation clause in the tenancy agreement, he will not return any amount for the rest of the period of the contract even if I vacate the apartment five months prior to the contract's expiry.
2 Saving Green and Beating the Clock "Understand the cancellation clause in your contract, investigate sponsorship opportunities, schedule meetings during low usage (non-peak) times and keep your budget flexible.
A failure to follow up on a contractor discount, a cancellation clause or a change order can put you on a fast track to a conflict with the vendor, and may cause a loss for your client.
Golub said landlords are also now more likely to put a "cancellation clause" in the lease allowing the tenant to back out after a certain time.
If it is longer, it might be trying to hide something, like a cancellation clause. "You really have to read the fine print of these documents," Nathan added.
The cancellation clause details how the insured or the insurer can cancel the policy.
The contract includes a cancellation clause for the second vessel.
We had a five-year lease on office space in Oak Brook, and we had one client with a 90-day cancellation clause.
Ensure that you have a new-type cancellation clause based on higher headquarters issuing rules or regulations that will torpedo the local event.
The return to a market situation would obviously restore fair competition to the industry but the idea is still beset by major difficulties: costs are much higher than those pertaining prior to September 11, companies are at a disadvantage compared with airlines from third states that enjoy common funds, insurance companies have a cancellation clause which allows them to terminate contracts within a short period (seven days).
The new policies will also have a cancellation clause built in for travelers booked on a cruise ship that will oblige them to pay a fee to travel agencies if they cancel.