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Termination Deed for Malaysia

Termination Deed Template for Malaysia

A formal legal document governed by Malaysian law that effectively terminates an existing agreement between parties while establishing clear terms for the conclusion of their business relationship. This deed addresses the mutual release of obligations, settlement of outstanding matters, return of property, and specifies any surviving obligations. It ensures compliance with Malaysian legal requirements, including the Contracts Act 1950 and other relevant legislation, providing a clean break while protecting all parties' interests through properly documented termination arrangements.

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What is a Termination Deed?

A Termination Deed is a crucial legal instrument used when parties wish to formally end their contractual relationship under Malaysian law. This document is particularly relevant when there is a need to document the mutual agreement to terminate, establish clear terms for separation, and ensure all loose ends are properly tied up. The deed becomes necessary in various scenarios, such as early termination of commercial contracts, conclusion of joint ventures, or ending of business partnerships. It provides comprehensive coverage of key aspects including the effective date of termination, settlement of accounts, return of property, and surviving obligations. The Termination Deed must comply with Malaysian legal requirements, including those under the Contracts Act 1950, and may need to be properly stamped under the Stamp Act 1949 to be admissible in Malaysian courts.

What sections should be included in a Termination Deed?

1. Parties: Identification of all parties to the termination deed, including their full legal names, registration numbers (if companies), and registered addresses

2. Background: Recitals explaining the original agreement being terminated, its date, and the circumstances leading to termination

3. Definitions: Definitions of key terms used in the deed, including reference to the Original Agreement and any related documents

4. Termination: Clear statement of termination of the original agreement and the effective date of termination

5. Release and Discharge: Mutual release of parties from obligations under the original agreement and discharge of future liabilities

6. Settlement of Outstanding Amounts: Provisions dealing with any outstanding payments, refunds, or financial settlements between the parties

7. Return of Property: Requirements for return of any property, documents, or confidential information

8. Surviving Obligations: Identification of any provisions from the original agreement that will survive termination

9. Governing Law and Jurisdiction: Specification of Malaysian law as governing law and jurisdiction for disputes

10. Execution: Formal execution block for signing by all parties

What sections are optional to include in a Termination Deed?

1. Non-Disparagement: Used when parties wish to include mutual obligations not to make negative statements about each other after termination

2. Confidentiality: Used when there is sensitive information involved and parties need to maintain confidentiality post-termination

3. Tax Provisions: Required when the termination involves significant financial settlements or tax implications

4. Further Assurance: Used when parties may need to execute additional documents or take further actions to give effect to the termination

5. Intellectual Property Rights: Included when the original agreement involved IP rights that need to be addressed upon termination

6. Employee Matters: Required when termination affects employment relationships or requires transfer of employees

7. Third Party Rights: Needed when the termination affects rights of third parties under the original agreement

What schedules should be included in a Termination Deed?

1. Schedule 1 - Original Agreement: Copy or details of the agreement being terminated

2. Schedule 2 - Outstanding Amounts: Detailed list of any outstanding payments, refunds, or financial settlements

3. Schedule 3 - Property to be Returned: Itemized list of property, documents, or materials to be returned by each party

4. Schedule 4 - Surviving Provisions: Detailed list of provisions from original agreement that will survive termination

5. Appendix A - Form of Release: Template of any additional release documents to be executed

6. Appendix B - Settlement Calculation: Detailed calculations of any settlement amounts or financial adjustments

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

Malaysia

Publisher

Ƶ

Cost

Free to use

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