Kill Fee Clause

What This Clause Does

A kill fee is compensation you receive if the client cancels a project after you've started work. Without one, a client can pull the plug at any time and you lose all the time you've invested. Kill fees are typically a percentage of the total contract value, calculated based on how far into the project the cancellation occurs.

Kill fees protect your livelihood — especially important for projects that require significant upfront time investment or cause you to decline other work. Many clients resist kill fees, but they're a professional standard in creative and consulting industries.

What This Looks Like in a Contract

"In the event Client cancels this Agreement after work has commenced, Client shall pay a kill fee as follows: 25% of remaining fees if cancelled before [Milestone 1]; 50% of remaining fees if cancelled after [Milestone 1] but before [Milestone 2]; 100% of remaining fees if cancelled during final phase."

Red Flags to Watch For

• No kill fee provision — client can cancel at any time with zero compensation
• Kill fee only covers work already invoiced, not time invested in future milestones
• Kill fee waived if client claims the work was unsatisfactory (subjective standard)
• Kill fee calculation doesn't account for held time or declined projects

Negotiation Strategies