Definition, Meaning & Synonyms
termination-fee
noun
/ˌtɜːrmɪˈneɪʃən fiː/

Definition
A termination fee is a financial penalty that one party must pay to another when an agreement or contract is prematurely ended.

Examples
- If you cancel your subscription before the agreed period, you may be charged a termination fee.
- The company had to pay a substantial termination fee after deciding to withdraw from the merger.

Meaning
It serves as a deterrent against breaking a contract and compensates the non-breaching party for potential losses and inconvenience caused due to the termination of the contract.

Synonyms
- cancellation fee
- breakage fee
- penalty fee