Document background
The Cancellation Contract (Aufhebungsvertrag) is a crucial document in German employment law used when both employer and employee agree to terminate their employment relationship by mutual consent. It serves as an alternative to unilateral termination and is particularly useful in situations where parties wish to avoid notice periods or potential dismissal protection disputes. The document typically includes comprehensive provisions regarding termination date, severance payments, outstanding benefits, confidentiality obligations, and mutual releases. It must comply with German civil and labor law requirements, including written form requirements and consideration of social security implications. The agreement is commonly used during restructurings, in cases of mutual disagreement, or when providing more favorable terms than a standard termination would offer.
