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PES Contract Clauses > Termination for Convenience Example 1

13. TERMINATION FOR CONVENIENCE

The parties may terminate this agreement by mutual agreement. Such termination must be in writing and signed by both parties. The Participant may unilaterally terminate this agreement upon [enter number] days written notice by paying the lesser of [enter minimum monetary termination penalty, and what currency is used] or [enter percentage of past payments to be forfeited] of all payments received as of the date of termination. The Ministry may unilaterally terminate this agreement upon [enter number] days written notice by paying [enter percentage penalty] of the net present value of future payments under the agreement, measured as of the date of termination according to the formula specified in the Program Guidelines. Payments to be made or received upon termination are to be calculated as provided in the Program Guidelines.

Context of this Clause

• Participation agreement for a national REDD+ program
• Ecosystem service: forest carbon emissions reduction credits or conservation/restoration services expected to yield forest carbon emissions reduction or removal
• Single seller signing a government-provided form contract (which is backed up by detailed program guidelines) with a representative of the government ministry that administers the REDD+ program
• Source: Lessons Learned for REDD+ from PES and Conservation Incentive Programs, Examples from Costa Rica, Mexico, and Ecuador

About: Termination for Convenience

Disclaimer: Materials on this site are meant to highlight issues that should be considered in PES transactions, not to provide a substitute for experienced legal counsel. It will be essential to engage legal counsel in conjunction with any PES transaction to ensure that any agreements reflect the latest developments in the field and comply with current local and national legislation.

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