21/12/16 Termination and Expiration

Termination Expiration

Typically in a contract you will find a phrase like This agreement terminates on August 23, 2017. One may argue that termination entails one or more parties’ ending a contract sooner than it otherwise would have ended; and in this case the correct word to use would seem to be expires.

One can readily find in legal reference works instances of termination used to refer to any means by which a contract comes to an end. Consider, for example, the following, which is from 17A Am. Jur. 2d. Contracts § 524: “A contract may be discharged by performance in accordance with its terms; in fact, this is the normal termination of every contract. A contract may also be terminated by the expiration of the time during which it is to remain operative.” In this passage, expiration is considered a form of termination rather than something distinct from termination.

On the other hand, it’s also easy to find contract language suggesting that expiration doesn’t constitute a form of termination. For example: “All such charges and expenses shall be promptly settled between the Parties at the Closing or upon termination or expiration of further proceedings under this Agreement.” If expiration constituted a form of termination, logic would require that one omit “or expiration.”

The definitions of termination and terminate in Black’s Law Dictionary are consistent with the notion that termination includes expiration. Termination is defined as meaning “The act of ending something” and “The end of something in time or existence.” In other words, termination is both something you do and something that can simply happen. To the same effect, terminate is defined as meaning “To put an end to; to bring to an end” and “To end; to conclude.”

By the way, one can dismiss out of hand the usage terminates and expires, as in This agreement will terminate and expire upon cessation of commercial operation of the Plant. Depending on the meaning of termination that you prefer, terminates and expires entails either inconsistency or redundancy.