An early termination fee is a charge levied when a party wants to break the term of an agreement or long-term contract. They are stipulated in the contract or agreement itself, and provide an incentive for the party subject to them to abide by the agreement.
Early Termination Fee – The total fee that will be charged for early termination of a contract or agreement. If the contract has a declining rate “Early Termination Fee” refers to the initial or starting amount.
Early Termination Fee Amount – The fee that would be assessed at a point in time. If the contract has a flat fee, the fee remains constant for the period described in the contract. If the contract has a declining fee the fee decreases at a rate described in the contract as a period elapses.
Early Termination Fee Rate – The Rate at which an Early Termination Fee declines.