When you sign an employment contract, you are committing yourself to working for the company in question for a set period of time. Often, however, employees elect to exit their contracts before the contract term ends. If you are considering this option, first ponder the impact that an early contract termination could have upon your future within the workforce, then decide if your early departure is worth the risk.

Breach of Contract

In many cases, employment contracts have an out clause, stipulating that the worker must give a set amount of notice. If your contract has no clause, or you don’t give the amount of notice required per your contract, you could be in breach of contract. If this occurs, your former employer may elect to sue you for damages. These damages could include, but aren’t necessarily limited to, the cost of hiring temporary staff or revenue that is lost as a result of your early departure.


Some contracts stipulate the employees must pay penalties for exiting their contracts early. If your contract states that you are obligated to pay a fine if you exit your contract early, you will likely have to pay this amount. Often, companies take this amount out of your final check instead of asking you to pay it directly. In many cases, this final amount is intended to cover the cost of hiring and training a new employee, though there is no legal limit to the fine that employers can impose. It is wise to carefully look for any penalty stipulation before you sign an employment contract to ensure that you don’t get hit with an unduly harsh fine should you quit.

Missed Bonus

In some cases, leaving a contract early means missing out on a promised bonus. Some employers offer their workers bonuses for completing terms of employment. These bonuses may also be based, at least in part, upon merit. If you exit your contract before you are due to receive your bonus, you will likely no longer be subject to these monetary rewards for your hard work.

Reputation Damages

Some employers seek to prevent their workers from leaving early by promising reputation damage should they choose to do so. Particularly in fields that are difficult to break into, employers can blacklist those who leave early. This can potentially make it more difficult for these workers to earn gainful employment in the same industry in the future.