Personnel

The customer and the outgoing provider will likely need a new "transition contract" to cover the period in which services will be taken over a new provider. This contract will enable designated employees to become employees of the new provider and waive any contractual nonsolicitation provisions that had been in effect.

Other employee-related issues may already be covered by the existing contract, such as "make-whole costs." These can include the costs of paying severance to terminated employees or moving the provider's own personnel to other states. It may also be necessary to offer bonuses to properly motivate certain personnel to stay on during the transition period.

Conclusion

If the customer is set on terminating an agreement before it's due to expire, the parties nevertheless need to remember certain "rules of the road" for this to occur as smoothly as possible. In the end, remembering the "Three P's" is in both parties' best interests.