This clause protects you if a specific named individual (the "key person") leaves the company or organization you're contracting with. For example, if you hire a marketing agency and the contract says "Sarah Chen will lead your account," this clause lets you exit if Sarah leaves. This matters because you're often paying for that person's specific skills and relationships. Without this protection, the company could replace Sarah with someone less experienced, and you'd have no recourse. Courts recognize that personal service contracts depend on the actual person involved.
Define "key person" very narrowly—name specific individuals and their exact roles, don't just say "senior staff." Require the company to give you 30 days' notice before the key person leaves (if they know in advance) so you can plan. Also negotiate a replacement clause: can they substitute someone equally qualified, or do you have termination rights only? ---
Frequently Asked Questions
What does this clause mean in simple terms?
This clause protects you if a specific named individual (the "key person") leaves the company or organization you're contracting with.
Why should I care about this clause?
For example, if you hire a marketing agency and the contract says "Sarah Chen will lead your account," this clause lets you exit if Sarah leaves.
What are my options?
This matters because you're often paying for that person's specific skills and relationships.
How does this affect small businesses?
Without this protection, the company could replace Sarah with someone less experienced, and you'd have no recourse.