A -- thereof [ˌðɛərˈɒv]
1. (Law) of or concerning that or it
2. (Law) from or because of that
Collins English Dictionary – Complete and Unabridged 6th Edition 2003. © William Collins Sons & Co. Ltd 1979, 1986 © HarperCollins Publishers 1991, 1994, 1998, 2000, 2003
B -- "Both you and the company may terminate this contract by giving the other party one month's notice in writing or payment in lieu thereof."
'in lieu thereof' is not popular, in this case it is referring to a 'lease/term' arrangement, and used at the e n d of a sentence to make it proper English.http://answers.yahoo.com/question/index?qid=2...
If it was used at the beginning of the sentence it would state, 'in lieu of'.
–noun 1. place; stead.
—Idiom2. in lieu of, in place of; instead of: He gave us an IOU in lieu of cash.