A plan for managing the end of a supplier contract should be created when?

Planning for contract termination during the negotiation phase ensures that exit clauses, data migration responsibilities, transition support, and continuity arrangements are formally captured and agreed upon before the contract is signed. This proactive approach protects the service provider and avoids scrambling for contingency plans when the relationship is already under strain. ITIL Supplier Management explicitly recommends that termination plans be part of initial contract design.

Waiting until the contract is about to end leaves insufficient time to negotiate transition terms, arrange alternative suppliers, or protect service continuity.

While risk awareness is valuable, waiting for the Supplier Manager to perceive a risk is reactive rather than the proactive stance ITIL requires for contract governance.

Creating the plan only after the contract has been agreed means exit provisions may not be contractually enforceable, as they were not negotiated as part of the agreement.