When the Beatles broke up in 1970, fans were devastated. The group had transformed popular music, but disagreements about money, management, and creative direction had made it difficult for them to continue working together. So, the Beatles stopped recording as a group, and the individual musicians moved on to their own successful solo careers.
However, the Beatles still had contracts, royalties, and other interests that didn’t disappear simply because the musicians no longer wanted to work together. In December 1970, McCartney sued to dissolve their partnership. A court appointed a receiver in 1971, but the partnership wasn't formally dissolved until 1975. After that, Apple Corps, the company the Beatles had established, continued to manage their shared business interests.
The Beatles' experience isn't unique to the music business – or business in general. Not only do bands break up, but partners in other businesses decide it’s time to go their separate ways. Sometimes, the breakup is amicable, and sometimes, it’s anything but. Regardless, when most business partners go their separate ways, assets, liabilities, and a myriad of legal issues remain.
Ideally, the partners would have dealt with the possibility of a breakup in their original contract. But when people form a business relationship, they are full of hope. Even though few business relationships last forever, partners don’t want to think about the relationship ending, much less focus on what happens if the business breaks up. Yet, it’s best to plan for the eventual ending of a business relationship in advance.
And while there is “standard” contract language, there are no “standard” business relationships – each relationship is unique to the individuals involved. This article discusses how business contracts end and which provisions should be included to make a future separation go more smoothly and be less painful.
How and When Contracts End
A few contracts, such as a real estate lease, have a specific end date. But agreements outlining business relationships rarely have a specified termination date. Instead, they have a list of facts or circumstances that terminate the agreement. For a band agreement, that might be when a member decides to leave. For an LLC Agreement for a real estate investment, it might be when the real estate is sold. For a recording contract or services agreement, it might be when the deliverables are completed.
Even then, contracts don’t always end on a planned schedule. Circumstances can arise that make the contract end early, or that extend it longer than the parties expect:
One party might breach the agreement, and the other decides to exercise their right to terminate.
A party might use a negotiated right to terminate early, even without a breach.
The agreement might renew automatically because the parties don’t give a required notice to terminate at the end of the contract term.
A court or receiver might end the agreement due to bankruptcy, another financial issue, or a process called judicial dissolution.
In addition, parties also can agree to extend or shorten their relationship. Since this usually functions as a contract amendment, the agreement should be in a formal writing prepared by their attorney, rather than based on an understanding or a handshake.
Some contracts are written so they end automatically when a specified event occurs. Others give a party the option to terminate the agreement upon written notice. Or, the law might give a party the right to rescind a contract, such as when the other party concealed material information.
It’s not always easy to determine when a contract might end. For one thing, the relevant language isn’t always in a section labeled “Termination.” In addition to legal rights that might not be in a contract, circumstances that can end a contract often are scattered throughout the contract.
For instance, a commercial lease might grant the landlord a right to terminate the lease if the tenant doesn't pay rent. At the same time, another provision might automatically renew the lease unless notice is given by a deadline. Missing that deadline could mean another lease term, even when the tenant intended to leave.
A band agreement might allow the band members to oust a member who repeatedly misses performances. Or the agreement might say a member can leave the band with 60 days' notice.
Contract provisions relating to the end of the relationship should also address what happens next. For instance, a band agreement should say who has the right to use the band’s name and whether a departing member has the continuing right to any income from recordings or activities while they were a member. A lease should specify whether a tenant must remove trade fixtures and rights regarding the security deposit.
When an agreement is silent, the law may supply termination rights or limits. Real estate leases, for example, may be subject to state and sometimes local laws governing termination notice and other requirements. And state partnership or LLC law might say what happens if a band agreement is silent on certain issues. It’s important that parties consult with an attorney so they understand not only what their contract says but also how the law will interpret what the contract doesn’t say.
When a Contract Doesn't Completely End
Ending a contract doesn't necessarily eliminate all obligations under it. Some contracts list obligations that are meant to survive contract terminations. Other times, legal requirements might impose continuing obligations.
Consider a situation similar to the Beatles. A band that breaks up after recording several albums. The members may never perform together again, but those recordings could earn royalties for decades. Someone still has to collect and distribute income, manage the band's accounts, and decide who can authorize uses of its music. A band agreement that addresses these issues in advance might prevent costly and time-consuming litigation later.
Now consider a commercial lease tenant whose lease has expired. The tenant might be gone, but unpaid rent, damage to the premises, a security deposit, or the removal of improvements could remain unresolved. Or perhaps the tenant left valuable equipment behind. Moving out doesn't necessarily resolve those issues, and they should be in the lease so there’s no confusion.
Contracts often address continuing obligations involving:
Confidentiality. A former band member may know about unreleased recordings or finances, while a tenant may possess confidential information obtained during the lease.
Non-competition and non-solicitation. An agreement may restrict certain activities after departure, although enforceability varies with applicable law.
Return of property. A musician may need to return equipment belonging to the band; a tenant must surrender possession and return keys or access cards.
Indemnification. A musician, landlord, or tenant may remain responsible for specified claims arising from conduct during the relationship.
Payments. Former band members may be entitled to royalties, while tenants may owe rent or other charges that accrued before termination.
Transition assistance. Departing musicians may need to transfer access to accounts or records. At the same time, tenants may have obligations to transfer utilities into the landlord’s name, return keys, or provide the landlord with security pass codes.
Non-disparagement. A band agreement may prohibit band members from making negative public statements about each other.
Intellectual property. If the band owns intellectual property rights in the band’s name, songs, or recordings. The band agreement should outline how those rights will work after the business relationship ends.
If not addressed in advance, these issues can cause disputes precisely when the parties are least inclined to cooperate. However, when the parties are first building the relationship, they are likely to have a more cooperative spirit and be able to agree to reasonable terms. Together with a survival provision that identifies which obligations continue after termination and, when appropriate, how long they last, this upfront planning can make a breakup as painless as possible.
Surviving Contract Termination
Which contract provisions survive termination will depend on the specific business relationship. Since every business relationship is unique, the contract should be customized to the needs of the individual relationship. Although each business will have unique needs, here are some of the common questions that arise when preparing the termination provisions of business contracts:
How long do the obligations continue?
Some obligations need a definite deadline; others may continue for years. A musician's right to receive royalties from existing recordings might outlast the band for decades. But a tenant's obligation to remove improvements might have to be completed quickly after the lease ends.
How will disputes be resolved?
Litigation is expensive, time-consuming, and emotionally draining and can result in public disclosure of a dispute the parties would rather keep private. So, the contract may require mediation or arbitration instead of litigation. The contract also might specify governing law or identify where a lawsuit must be filed or mediation or arbitration must occur. \
An attorney can help parties determine which dispute resolution process and state law make the most sense for their situation. Those provisions become especially important after the parties stop working together and cooperation becomes harder.
How long can someone wait to bring a claim?
Statutes of limitations set deadlines for legal claims. Sometimes, those deadlines are longer or shorter than is appropriate for the relationship. So, a contract can shorten or, less often, lengthen those provisions. Whether that provision is enforceable depends on applicable law, so the parties should consult with an attorney for advice when establishing contractual limitations periods.
What remedies and damages can the parties pursue?
There are many different types of damages, including compensatory, liquidated, consequential, incidental, and punitive or exemplary. Plus, there are both legal and equitable remedies (a throwback to English common law). And in the US, each party typically pays their own attorney fees regardless of who wins. Depending on the type of business relationship, contracts often specify certain types of damages, allow specific remedies, or allocate attorney fees to the winning party in a lawsuit when it wouldn’t typically be permitted under court rules.
Planning for the End Before It Happens
The Beatles stopped making music together more than half a century ago, but their business continues. Their story is a reminder that ending a relationship and ending the obligations associated with it may not go hand in hand.
Negotiating how a contract will end can seem like planning for divorce before a wedding. Everyone hopes things will work out, whether they're forming a band, signing a commercial lease, or getting married. But relationships change, and even an amicable ending can leave unfinished business. And it’s easiest to plan for that business while everyone is optimistic and reasonable rather than in the midst of a bitter breakup.
Finally, contracts should be tailored to their needs, rather than their conforming their business to a “standard contract.” A well-drafted contract can't guarantee that the parties will get along or that their plans won't change. It can, however, establish expectations about termination and continuing obligations before disagreements arise. Setting expectations in advance can prevent disputes later. And when those disputes lead to a breakup, planning gives everyone a better chance to move on without taking old disputes into the next venture.
© 2026 by Elizabeth A. Whitman
Any references to clients and their legal situations have been modified to protect client confidentiality.
DISCLAIMER: The content of this blog is for informational purposes only and does not provide legal advice. No one should take any action regarding the information in this blog without first seeking the advice of an attorney. Neither reading this blog nor communication with Whitman Legal Solutions, LLC or Elizabeth A. Whitman creates an attorney-client relationship. No attorney-client relationship will exist with Whitman Legal Solutions, LLC or any attorney affiliated with it unless a written contract is signed by all parties.