Reputation is another reason. Professionalism in handling a transition situation is important to both companies' images. Word will get around if one party gave the other party a hard time during the transition. Also, there is always a chance that individuals will be on the other side of the fence later in their careers, so if nothing else, professionalism is in one's self-interest.

Pricing

To enable a buyout of the remainder of the provider's contract, the parties should review the existing agreement. Agreements containing early termination clauses often provide for a payment to the nonterminating party. (One example of such a provision is found in a rare reported case, decided about a year ago, Southern Union Co. v. CSG Systems International Inc.

The size of the buyout payment will vary based on when the termination took place, and it will decline in proportion to the amount of time that would have remained of the contract. The agreement will usually require several months between the time of the terminating party's notice and the effective date of such a termination.

Early-termination provisions typically are for canceling the entire service, although they sometimes may be broken down for termination on a service-by-service basis. The provider will want to have drafted this clause to make sure that an unbundling of the services will not penalize the provider if there was any customization work done for which fees ought to be recouped.