Master Alliance Provisions Guide (MAPGuideⓇ)
Termination and Withdrawal
This issue identifies provisions that illustrate the range of conditions that may trigger termination of, or withdrawal from, an agreement. There are some types of termination provision that tend to be consistent across different agreements (see those categorised as ‘general’ in the example approaches below), whereas others may be specific to an agreement or type of agreement. Some agreements rely on an external determination of a timeframe, such as the end of a pandemic, to set the conditions under which they may be terminated.
Questions to consider when developing a termination provision
- Under what circumstances may a party terminate the agreement?
- Under what circumstances may a party withdraw from the consortium/project?
Example approaches found in the MAPGuide
- Either party may terminate the agreement in the event of material breach or bankruptcy.
- The agreement may be terminated by mutual agreement of the parties.
- The agreement may be terminated ‘for convenience’ upon written notice.
- Either party may terminate the agreement in the event of force majeure.
- The funder/purchaser may terminate the agreement in the event of violation of law, fraud or financial irregularities, or unresolved conflict of interest on the part of the developer.
- Supply/Advance Purchase Agreements
- The agreement may be terminated if clinical trials are unsuccessful (e.g. an adverse safety signal or evidence that the product is likely to have an unsuitable safety and efficacy), or marketing authorization for the relevant territory is not granted.
- The purchaser may terminate the agreement in the event of a ‘contract interference event’ (i.e. requirement by a foreign government, funder or third party to take actions that may adversely impact supply of the product).
- Consortium Agreements
- A party may withdraw from the consortium agreement if key personnel are unwilling or unable to continue work on the project and a suitable replacement cannot be found.
- License Agreements
- The licensor may terminate the agreement if the licensee does not file a BLA (Biologics License Application) within the timeframe specified in the agreement.