A termination clause refers to a clause in an employment contract, which allows the employee to unilaterally terminate the contract by paying a specified (usually considerable) fee to the employer. This fee can be paid directly by the employee, but is most commonly paid by a potential employer wishing to hire their services.[1]​.

It is most commonly used in reference to sports teams, where a transfer fee "Transfer (football)") is usually paid for a player under contract; However, the current owning club is not obliged to sell its player, and if an agreement on an appropriate fee is not reached, the purchasing club can resort to paying the player's release fee (if its contract includes such a clause), which the owning club cannot block. Termination clauses are usually set at an amount higher than the player's expected market value. However, sometimes a player from a small club signs a contract but insists on a low release fee to attract larger clubs if his performance generates interest, which in effect acts as a set reserve price for the selling club.

The objective of this clause is twofold; Firstly, with its high amount, it deters competing teams from trying to acquire the player if the current club shows no signs of selling him, and secondly, it raises any indication to the players that they are not fulfilling their contractual commitment.

In Argentina, the player notifies that he will execute the clause via document letter to the club. The club must provide the CBU of the bank account for the deposit. If refused, the footballer can pay directly to the Argentine Football Association.

Also the party that breaks the link must pay taxes and administrative costs so that the AFA must issue the transfer certificate.[2]​.

In Spain, termination clauses have been mandatory in football contracts since 1985.[3] If they wish to terminate their contract, players must pay the termination fee to their current club personally (through the league body), which would be advanced to them by the club signing them; However, the Spanish government originally considered this advance of funds to be taxable income, requiring the purchasing club to pay income taxes in addition to the fee itself, with the prohibitively high costs involved in this double transaction discouraging clubs from making such deals. In October 2016, the laws changed and termination fee advances to players were no longer subject to tax, meaning only the fee itself had to be paid.[4]​.

One of the most resonant cases in the history of football is that of Luís Figo. In 2000, he was transferred from Fútbol Club Barcelona to Real Madrid Club de Fútbol by paying his clause of 60 million euros.[5]​.