# Exit / Transition Clause

Source: https://contracko.com/clause-library/exit-clause

# Exit / Transition Clause

Governs an orderly handover of services, data and assets when a contract ends.

## What it is

An exit (or transition) clause sets out the supplier's obligations to support a smooth handover at the end of the contract: returning data, transferring know-how, assisting a successor supplier, and continuing services during the wind-down period.

## Why it matters

The end of an outsourcing or IT contract is high-risk: an uncooperative incumbent can hold a customer hostage. A strong exit clause guarantees data return and transition support, protecting business continuity.

## How to apply it

- Require return or deletion of all customer data in a usable, agreed format.
- Define a transition assistance period and the rates payable for it.
- Cover knowledge transfer, documentation, and cooperation with a successor.
- Make exit obligations apply on any form of termination, including for cause.

## Negotiation tips

- • Customers should require an exit plan to be maintained throughout the term, not drafted at the end.
- • Suppliers should agree clear scope and paid rates for transition work.

## Common pitfalls

- • No data-format obligation, leaving the customer with an unusable export.
- • Exit duties that lapse if the supplier terminates for the customer's breach.

### How Contracko helps

Contracko extracts the transition-assistance period, data-return format obligations, and end-of-term notice window from each IT or outsourcing contract. Reminders fire well in advance of expiry so transition planning starts on time, and the contract repository gives your successor supplier and legal team immediate access to the exit obligations without hunting through old email.

## Legal references

- [BW 6:248 Reasonableness and fairness Dutch law](https://wetten.overheid.nl/BWBR0005289)
- [GDPR Art. 28(3)(g) GDPR: return or deletion of data EU law](https://eur-lex.europa.eu/eli/reg/2016/679/oj)

Unless marked otherwise, references are to Dutch law (Burgerlijk Wetboek, the Dutch Civil Code); EU instruments such as the GDPR apply across the EU. This is general information, not legal advice. Other jurisdictions treat these concepts differently. Verify the current text and your situation with a qualified lawyer.

## Relevant for

[IT Services](https://contracko.com/industries/it-services)[Managed Service Providers](https://contracko.com/industries/managed-service-providers)[Software & SaaS](https://contracko.com/industries/software-saas)[Financial Services](https://contracko.com/industries/financial-services)[B2B SaaS Companies](https://contracko.com/industries/b2b-saas)

## Related clauses

- [Renewal and Notice Period Clause](https://contracko.com/clause-library/renewal-and-notice)
- [Data Processing Clause](https://contracko.com/clause-library/data-processing)
- [Termination for Cause Clause](https://contracko.com/clause-library/termination-for-cause)
- [Service Level Agreement (SLA)](https://contracko.com/clause-library/service-level-agreement)

## Related terms

- [Termination](https://contracko.com/glossary/termination)
- [Data processing agreement (DPA)](https://contracko.com/glossary/data-processing-agreement)
- [Notice period](https://contracko.com/glossary/notice-period)

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## Frequently asked questions

Common questions about this clause.

- **Q:** When should an exit plan be agreed?
  **A:** Ideally at the outset and kept current, so the handover is not negotiated under pressure when the relationship has already broken down.

- **Q:** Do exit obligations apply if the customer is at fault?
  **A:** They should: a well-drafted clause keeps data return and transition support in force regardless of who caused the termination.

- **Q:** What data format should the supplier use when returning data?
  **A:** The contract should specify a standard, machine-readable format (such as CSV, JSON, or SQL dump) so the customer can migrate to a successor system without manual rekeying. A proprietary format obligation is a red flag.

- **Q:** How long should a transition assistance period last?
  **A:** Typically three to twelve months, depending on the complexity of the service. For critical systems, a longer period with defined milestones and escalation rights gives better protection.

- **Q:** Can the supplier charge for transition assistance after termination?
  **A:** Yes, unless the contract says otherwise. Transition assistance beyond standard exit duties is usually billed at agreed day rates. Customers should negotiate a rate cap at signing, not when they need the service urgently.

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