What Is a Termination Agreement?
A termination agreement is a legal form which is signed at the termination of an agreement or arrangement. This term is most commonly used in reference to termination agreements which are used when an employee is released from employment, but the term can also refer to an agreement which terminates a lease or another type of contract. Before signing any forms upon terminating an agreement, it is critical to read them very closely, as there may be clauses which are unexpected or surprising. In the case of an employment termination agreement, the employer presents the agreement at the time that an employee is separated by being fired or laid off. Employees may also negotiate such agreements when they leave voluntarily. The agreement, also known as a severance agreement or separation agreement, sets out the rights and responsibilities of both parties so that everyone understands what is involved in the termination.
