Kill Fee Clause Explained: What Freelancers Get When a Project Is Cancelled
This page is general information, not legal advice.
A kill fee clause says what the client pays you if they cancel a project before it is finished. Writers, designers, photographers, illustrators and other creative freelancers often see one. It looks like protection, because it promises you something if the work is killed. But the wording decides whether that "something" is fair. A badly drafted kill fee can cap what you get, let the client keep your work, and give the client the power to decide when the fee applies. This page explains how the clause usually works and covers five common problems. For each one you get an illustrative example, why it matters, and wording you can propose. How these clauses are read and enforced varies by jurisdiction.
The example clauses below are illustrative. They are not taken from any real company's contract.
How a kill fee clause usually works
Most kill fees are a percentage of the agreed project fee, a flat amount, or payment for the work done so far. The clause often sits next to a termination clause that lets the client end the project at any time (see termination for convenience clauses explained). Put together, the client can usually walk away whenever it wants, and the kill fee is the price of doing so. The details to look at are how much you get, when it is paid, what triggers it, and who owns the work afterward.
1. A flat percentage that ignores how much work is done
A typical clause might read: "If Client cancels the Project for any reason, Client shall pay Contractor a kill fee equal to a percentage of the Project Fee, in full satisfaction of all amounts owed."
Why it works against you
A fixed percentage pays the same whether the client cancels on day one or the day before delivery. If you've finished most of the work, you may get far less than you've earned. The phrase "in full satisfaction of all amounts owed" can also wipe out your claim to expenses you already paid, such as travel, stock images or subcontractors.
What to ask for instead
Sample wording to propose: "If Client cancels, Client will pay (a) the greater of the kill fee or the fees for all work completed through the cancellation date, and (b) all approved expenses incurred before cancellation. Any deposit already paid is non-refundable."
2. The client decides whether the fee is owed at all
A typical clause might read: "No kill fee shall be payable if Client, in its sole discretion, determines that the Deliverables are unsatisfactory."
Why it works against you
This turns a cancellation fee into an option the client can skip. Almost any cancellation can be described as "unsatisfactory work," so the fee may never be paid. You have no process for fixing problems and no clear standard to meet.
What to ask for instead
Sample wording to propose: "The kill fee is payable on any cancellation by Client. If Client believes the Deliverables do not meet the agreed specifications, Client will give written notice describing the issues, and Contractor will have a reasonable opportunity to correct them before Client may cancel."
3. The client keeps your work after paying the kill fee
A typical clause might read: "Upon payment of the kill fee, all rights in any Deliverables, drafts and materials created under this Agreement shall vest in Client."
Why it works against you
The kill fee is meant to compensate you for a project that didn't happen. If the client also gets full ownership, it can use your drafts or hand them to someone cheaper to finish, after paying only part of the price. You also lose the chance to sell or reuse the work elsewhere. See IP assignment clauses explained.
What to ask for instead
Sample wording to propose: "If the Project is cancelled, all rights in the Deliverables and drafts remain with Contractor. Client may not use, publish or modify them unless it pays the full Project Fee, at which point the rights transfer as provided in Section [X]."
4. A kill fee paid only after a long delay
A typical clause might read: "Any kill fee shall be paid within the Client's standard payment cycle following receipt of Contractor's final invoice and all project files."
Why it works against you
"Standard payment cycle" isn't defined, so it could mean weeks or months. Making payment depend on handing over "all project files" also gives the client your work before you've been paid. If the payment is late, there's no interest or penalty to push it along. See contractor payment terms red flags and late payment fee clauses explained.
What to ask for instead
Sample wording to propose: "Client will pay the kill fee within [number] days of the cancellation notice. Delivery of files is not required for payment of the kill fee. Late amounts accrue interest at the rate stated in Section [X]."
5. The kill fee is your only remedy
A typical clause might read: "Payment of the kill fee shall be Contractor's sole and exclusive remedy for any termination or cancellation of this Agreement."
Why it works against you
This can stop you from claiming anything else, even if the client cancelled to avoid paying for work it is already using, or broke other promises in the contract. Combined with a broad liability cap, you may have very little leverage. See limitation of liability clauses explained.
What to ask for instead
Sample wording to propose: "The kill fee is Contractor's remedy for a good-faith cancellation by Client. It does not limit Contractor's rights if Client uses the Deliverables without paying the full fee or otherwise breaches this Agreement."
Also worth a look
A kill fee works best alongside a clear deposit, defined milestones and a written cancellation notice. Check whether the contract also lets you cancel, and on what terms, and whether a cancellation fee you owe the client is set out as a penalty (see liquidated damages clauses explained). For the bigger picture, see freelance contract red flags and creative services contract red flags.
Scan your own contract free
Kill fee wording is often short, and one phrase can decide whether you get paid fairly. Upload your freelance contract as a PDF, DOCX, TXT or MD file, or just take a photo of it, in the ScanMyTerms freelance contract review. In about a minute it lists clauses that work against you, with the risk level, the exact wording, why it hurts and how to change it. The free preview needs no sign-up and shows the risk count and the first two findings. The full report is $5. ScanMyTerms does not use your documents to train AI models, and reports are deleted after 7 days.
This page is general information, not legal advice. Contract rules vary by jurisdiction, so for decisions about a specific agreement, talk to a qualified lawyer where you work.
Sources
- All clause examples on this page are illustrative and written for this guide. They are not quoted from any real company's contract.
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