An enterprise is contracting with an outsourcing partner for a long-term engagement. The BEST time for the enterprise to plan for the event of contract termination is when:

Planning for contract termination is a specific aspect of contract management, distinct from general business continuity planning, although it contributes to overall BCP.

Waiting for issues to surface before planning for termination is reactive and can lead to hurried, disorganized, and potentially costly exits due to lack of prior agreement.

Developing the initial contract allows for proactive identification and agreement on exit strategies, data migration, intellectual property rights, and transition services before the engagement begins. This foresight minimizes disruption and potential disputes if the partnership ends, ensuring a smooth and controlled transition.

Deciding to terminate implies the event is imminent, which is too late to effectively plan and negotiate the complex details of contract termination.