non-cancellable costs
Definition
Non-cancellable costs are expenses you are legally obligated to pay even if you cancel a contract or stop a project before it is finished. These are costs you have already committed to through a signed agreement, meaning the other party can hold you to paying them regardless of whether you change your mind. Think of them as financial promises you cannot take back once you have made them.
Example
If you hire a printer to produce 10,000 brochures and they have already purchased the specialty paper before you cancel the order, the cost of that paper is likely a non-cancellable cost you must cover. You agreed to the job, they spent money on your behalf, and walking away does not erase that bill.
Watch Out
Before signing any contract, ask specifically which costs become non-cancellable the moment work begins, because that number can be much larger than you expect and could leave you paying thousands of dollars for a project you never completed.
See which terms appear in your contract?
This definition is for informational purposes only and does not constitute legal advice. Please consult with a licensed attorney for legal guidance.