Provision Database

Issue Introduction: Effects of Termination

This issue refers to provisions that set out the rights and obligations of each party upon termination of an agreement. Effects of termination provisions often also state that certain requirements, such as the protection of confidential information, will remain in force even after an agreement has been terminated. It is important to consider whether termination provisions should contain technology transfer, contract assignment and licensing obligations that would enable one party to continue the development or manufacture of a product in order to achieve the equitable access goals of a project.

Questions to consider when developing effects of termination provisions

  • What are the effects of termination or withdrawal by a party?

Example approaches found in the MAPGuide

  • Effects of termination provisions often found in MAPGuide agreements include:
    • Return of any unspent amounts from upfront payments to the purchaser/funder;
    • Destruction by each party of any confidential information received from the other party.
    • Survival of certain obligations beyond termination, such as confidentiality, indemnification, warranties and intellectual property rights.
  • A number of MAPGuide agreements also include provisions that enable a funder, purchaser or licensor to continue product development in the event of early termination of the agreement. There may be restricted circumstances in which these rights may be applied, such as the developer’s inability or unwillingness to continue product development. Termination provisions of this nature can include:
    • Requirements under a purchase agreement for a supplier to transfer or novate certain materials, equipment and/or services to the purchaser (this may include reserved CMO manufacturing capacity).
    • Fulfillment of a ‘trigger’ under a development funding agreement for a funder to use a ‘global access’ or ‘public health’ license (see Ensuring Continuity for further information).
    • A requirement for the developer to cease all work under a development funding agreement and assign all rights, title and interest to the funder.
    • Rights under a license agreement for the licensor to elect to research, develop, or sell the product, in which case the licensee must transfer all regulatory documentation for the product back to the licensor and provide transition assistance such as technology transfer and the transfer of inventory and third party agreements.

Related MAPGuide Commentaries & Resources