Risks › No kill fee

No kill fee.
Client walks, you absorb.

You blocked off four weeks. You turned down another client. You did two weeks of work. Then they cancel. Without a kill fee, you eat the cost of their change of mind.

Draft an agreement that prevents it

Free. No registration. No card. No catch.

What it means

In plain English.

A kill fee is a cancellation charge paid by the client when they terminate a project before completion, without cause. It compensates the provider for work already done, capacity already committed, and opportunity cost already incurred. Without one, mid-project cancellation has no financial consequence for the client.

What it looks like

"We're going in a different direction." "Budget got cut." "We hired internally." All said after you've started, sometimes after you've delivered half the work. The project stops. The income doesn't arrive. The weeks are gone.

The three costs

Work already done (hours, expenses). Capacity blocked for the project that won't be used. Opportunity cost of clients turned away to make room. A kill fee addresses all three.

Why it's standard in some industries

Kill fees are standard in publishing, advertising, and film. They exist precisely because creative and professional work requires commitment from both sides. The client's right to cancel is balanced by the provider's right to be compensated for the commitment.

Why it's missed

Cancellation feels like a remote possibility. It isn't always.

Why missed

It feels presumptuous

Asking for a kill fee before the project starts feels like you're assuming the client will cancel. In reality, it's standard professional practice that protects both parties' commitments.

Why missed

Deposit assumed to cover it

Many providers assume the deposit covers cancellation. Deposits cover work done. A kill fee compensates for opportunity cost and committed capacity beyond the deposit amount.

Why missed

Confusing kill fee and work-in-progress

Payment for work done and the kill fee are separate. You're owed for work completed regardless. The kill fee is the additional cost of the cancellation itself.

What can go wrong

The downstream consequences.

Weeks of lost income

You committed the time. The project cancels. You can't retroactively fill those weeks. The kill fee is the only mechanism to recover the opportunity cost.

Turned-away clients not recoverable

You declined or deferred other work to make room. Those clients found someone else. The kill fee is a proxy for that lost revenue.

Partial payment disputes

Without a kill fee clause, disputes arise over what the client owes for work in progress. The kill fee defines the answer before the situation arises.

No deterrent to casual cancellation

Without a financial consequence, cancellation is frictionless for the client. A kill fee creates the friction that makes clients think twice before committing and then pulling out.

Red-flag wording

These clauses leave you exposed to free cancellation.

The most common gap is simply no kill fee clause. But these phrases also create exposure.

Red flag

No kill fee clause

The client can cancel at any time with no financial consequence beyond paying for work already completed. Your opportunity cost isn't covered.

Red flag

"Either party may terminate at will"

At will with no cost is free cancellation. Add a kill fee to the termination-for-convenience provision.

Red flag

"Client shall pay for work completed"

Work completed is one component. The kill fee covers what the client owes beyond completed work — the commitment cost. Both need to be in the contract.

Red flag

No cancellation notice requirement

Cancellation effective immediately with no notice period eliminates your ability to plan. Combine kill fee with a notice requirement.

Safer pattern

How to calculate and write a kill fee.

Kill fees typically range from 25% to 50% of the remaining contract value, depending on how far into the project the cancellation occurs. Common structures: a flat percentage, a sliding scale based on project completion, or a fixed dollar amount per week of committed capacity.

BizDraft includes kill fee language as part of the termination-for-convenience provision in all project-based service agreements.

The pattern

Flat percentage. "If Client terminates this Agreement for convenience (without cause), Client shall pay a kill fee equal to [25% / 50%] of the total remaining contract value as of the termination date."
Sliding scale. "Kill fee is calculated as follows: 50% if cancelled before project start; 40% if cancelled in Phase 1; 25% if cancelled in Phase 2; 10% if cancelled in Phase 3."
Work-in-progress separately. "In addition to the kill fee, Client shall pay for all work completed through the termination date at the pro-rated contract rate."
Notice period. "Termination for convenience requires [14 days] written notice. Work and billing continue through the notice period."

Most affected