Technically speaking, an activated contract can still be edited, as long as the user has permission to do so. The best practice is one of business process, less of system configuration. For example, after adding a new contract status labeled "Terminated" that is in the "Activated" category, you could adopt the following business process.
- AE sends an email to the Salesforce admin team requesting contract termination, with the regional sales manager on cc
- Salesforce admin changes the contract status to "Terminated"
Configuring the "Terminated" status to also be in the "Activated" category ensures that the contract remains read-only by default to most users even after the status change. You can also expand this process to include a Terminated Date and Terminated Reason, which the AE can supply in the email request.
If you want other non-admin, super users to be able to handle contract terminations, you could create and assign a permission set with the following permissions.
- Edit permission on the Contract object
- Activate Contracts permission
tl;dr Salesforce permissions will allow you to empower some subset of users to terminate contracts using the standard Status field, once you figure out the right business process with checks and balances for your organization.