Several past clients have come to us here at Leslie Wm. Adams & Associates after having seen contracts suddenly terminated due to clients saying that it was no longer convenient to work with them. If this scenario sounds all too familiar to you, then you likely have the same question they all posed: does not a contracted partner have to have cause to terminate a contract? In most cases, the answer to that question is yes. However, there are indeed some situations when a partner to a contractual agreement can walk away from it if it believes doing so is in its best interest.
Did your scenario meet that criteria? It depends on the type of partner you were working with. According to the Congressional Research Service, government agencies are automatically afforded the right to terminate contracts for their convenience. Some common reasons given for invoking this right may include:
- Securing the ability to provide the products or services you offer in-house
- You being unwilling to renegotiate the terms of the contract
- A general deterioration in your business relationship
If the government partner that you were working with invokes this right, all you are typically entitled to is payment for the services your company has thus far rendered along with the costs associated with prematurely ending your work. You can only collect damages for breach of contract if you are able to prove that the agency never intended to honor the terms of your contract in the first place.
Private companies can only cite termination for convenience if you agree to grant them that right in the initial terms of your contract. More information on enforcing your contracts can be found by continuing to browse through our site.
