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“What is “termination for convenience?'”

| Aug 10, 2020 | Business Law |

Working with government agencies on different projects in Fort Lauderdale offers your company a number of distinct perks. First and foremost, such organizations tend to be much more stable than private companies (giving you the security that comes with knowing that your business partner is unlikely to suddenly go under). Yet such security often comes with a cost. 

In the aforementioned scenario, that cost may be your company suddenly left without a contracted partner if a local, municipal, state or federal entity decides that it not longer benefits them to work for you. 

Understanding the principle of “termination for convenience”

Impossible, you say? You may be right in thinking as such. After all, a partner cannot prematurely end your business contract without you giving them cause to do. Or so you thought. It turns out that a legal principle exists known as “termination for convenience,” and basically it affords carte blanche to companies looking for reasons to end their contracts with you. Some of these reasons may include flimsy excuses such as: 

  • Your company not wanting to renegotiate the terms of your contract 
  • Your partner securing to ability to provide your services on their own 
  • A general breakdown in your business relationship 

Seeking damages for breach of contract

Per the Congressional Research Service, government agencies automatically have the right to terminate business contracts without cause if and when they believe it to be convenient for them. Yet such an action may not preclude you from seeking legal action due to breach of contract. If you have evidence that shows that your now-former partner never intended to fulfill the terms of your contractual agreement, you may argue that demonstrates bad faith (which can then support your breach of contract claim).