Termination (Clause 10)

Note that it is always possible to bring an agreement to an end by mutual consent if all parties agree, but the Funder’s consent may be necessary for the termination of the Project.

Before committing to the Project and entering into the Agreement, the parties should consider that they have no unilateral right to withdraw except under clause 10.3. This is because the consequences of any party’s withdrawal are potentially very serious and may completely undermine the Project. However, the parties may wish to consider whether they should have a right to withdraw if another of the parties is taken over by a competitor.

Breach or Insolvency

If one party is insolvent or in breach of the Agreement, the other parties, if they decide to do so unanimously, may treat that party as having withdrawn from the Consortium; in other words they can terminate its involvement in the Project. You should check the Funding Conditions to see whether the Funding Body's agreement is necessary before any party is expelled from the Project.

Withdrawal of a member of the Consortium

Clause 10.3 allows any party to pull out of the Consortium if any of the Key Personnel is unable or unwilling to be involved. The use of this clause should be considered carefully; the withdrawal of a party could jeopardise the Project as a whole and it may be preferable not to allow any party to withdraw without the agreement of the other parties. In practice, if a key academic researcher moves to another institution, it may be possible to novate the Agreement with the new institution, but note that no new party may join the Consortium unless all the parties agree in writing and the agreement of any Funding Body may be necessary.

Note that the Funding Body will usually want to know if any of the Key Personnel are no longer to be involved in the Project.

Some provisions of the Agreement, especially confidentiality, intellectual property rights and limitations of liability should survive the end of the end of the Project or termination of the Agreement. Clause 8.3 allows for this.

Note that if on-going payments are to be made, some of the payment terms may also need to survive the end of the Project.

If a member of the Consortium withdraws or is treated as withdrawing from the Project:

  • the other parties will try to re-allocate the work (clause 10.4);
  • the withdrawing party may not recover any of its costs from any other party (clause 10.5)
  • that party's background may still be used for the Project (clause 10.6);
  • where that party has granted a licence to use its IP or has assigned rights in its IP, that licence and assignment remain in force (clause 10.7); but
  • licences granted to the withdrawing party will come to an end (clause 10.9); and
  • the arrangements about joint ownership of IP will not be affected (clause 10.8 of Consortium Agreement A only).
  • If a party believes that it has been expelled (treated as withdrawn) from the Project without due cause, its remedy is to challenge the other parties’ right to expel it under clause 10.1 and, consequently, their right to continue using its Intellectual Property under this Agreement.

New Members of the Consortium

A new member of the Consortium may be brought in only with the agreement of all of the parties. The Funding Conditions may also reserve the right for the Finding Body to approve a new member.