Separation of Termination From Discharge of Accrued Obligations: Why Ending an Arrangement Does Not Settle What Is Already Owed

This conceptual paper introduces Separation of Termination From Discharge of Accrued Obligations, a distinction between ending future performance under an arrangement and settling duties arising from performance already given. The fact that an arrangement has ended does not, by itself, establish that nothing remains owed. The paper assesses each duty by what it was owed for, when it accrued, and what the arrangement’s terms provide. Whether termination took effect is a separate question. Accrued duties may be fulfilled, released, or settled, while expectations that an arrangement would continue do not alone establish an outstanding obligation. The discussion connects the distinction to Lord Diplock’s account of primary and secondary obligations and examines the 1977 decision in Nolde Bros., Inc. v. Local No. 358, Bakery & Confectionery Workers Union. The Supreme Court required arbitration of a severance dispute after the agreement ended without deciding whether the employees were entitled to severance. The case illustrates why termination and the interpretation of claimed surviving duties require separate assessment. Part of the Power, Permission, and Obligation series within On Human Modeling, the paper examines who may terminate an arrangement and who may release what remains owed. Its framework can inform human–AI research on how systems represent cancellation, prior performance, and the status of outstanding obligations.