Protecting Both Business Finances And Futures

Terminating contracts for convenience

On Behalf of | Dec 16, 2019 | Contract Disputes |

When your business deals contractually in Irvine, you likely sleep soundly knowing that with such agreements in place, your partners need to have cause to end them. Thus your shock when, for no reason, they tell you that they intend to end your contract. Many business owners and executives in your same position have come to us here at Burkhalter Kessler Clement & George LLP questioning whether organizations are even allowed to go this. The principle of termination for convenience does indeed allow it, but only in select situations. 

Basically, termination for convenience can be cited when a contracted partner believes that it is no longer in their best interest to keep working with you. In such a scenario, you may be only entitled to collect money for whatever goods or services your business has provided up that point, as well as for expenses associated with ending your agreement. 

Per the Congressional Research Service, government agencies are automatically afforded this benefit; they can walk away from a contract when they want. Private organizations, however, can only end a contract at their convenience if you consent that right when negotiating your contract. 

Damages for breach of contract may still be available, however, when termination for convenience s cited in a contract case. To merit consideration for them, however, you have to able to prove that your contract was initially negotiated in bad faith. An example of this might be a partner contracting you to provide services that they ultimately plan to provide in house. If it did not state its intention in the contract (or set its terms beyond the time it intended to start supporting itself), that may be an example of bad faith. 

You can discover more about managing your contracts by continuing to explore our site. 



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