A mutual separation agreement is a contract which is entered when two parties mutually agree to separate from each other. These types of contracts can be entered between any two parties like husband and wife, two individual or business organizations or between an employee and his or her organization. The following is a sample mutual separation contract between an employee and his organization listing the terms of the contract, confidentiality aspects and the signatures of both the parties.

Sample mutual separation contract:


This mutual separation agreement covers all understanding between Sonia Wesley, the employee and FinConsole Ltd, the organization. This agreement relates to the employee’s separation from employment with this organization.

Terms of the mutual separation contract

  • Except for continuous obligations under the employment agreement between the employment and the organization, no other written or expressed agreement between the parties will have any effect from Oct 11, 2009.
  • The employee is separated from the organization with effect from Oct 10, 2009. After this date, except for any earned by unpaid compensation for the employee’s services, only the payments and benefits that the employee is eligible to after separation will hold good.
  • In effect with this mutual separation, the corporation agrees to pay $200,000 to the employee as severance pay less statutory withholding tax amount and other applicable deductions.


The organization and the employee agree to keep all matters concerning this agreement absolutely confidential and agree not to disclose verbally or otherwise either the existence or terms of this agreement to anyone including but not limited to past, present, or future employees of the organization.

Acknowledgement of the parties towards the agreement

Signature of the employee:   Sonia Wesley

Date: 10th Oct 2009

Signature of the organization: FinConsole Ltd

Date: 10th Oct 2009

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