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Can the government terminate a contract for convenience?
What is termination for convenience?
Can a contract be terminated without a termination for convenience clause?
What happens if a contractor terminates a contract for convenience?
TERMINATION FOR CONVENIENCE. Termination for Convenience (“T4C”) is the government’s unilateral contractual right to partially or completely terminate a contract without being required to pay damages, despite full contractor compliance with its contractual obligations.
Termination for convenience. A termination for convenience clause, or "T for C" clause, [1] enables a party to a contract to bring the contract to an end without the need to establish that the other party is in default, for example because the client party's needs have changed, or in order to arrange for another party to complete the contract.
- What Is Termination For Convenience?
- What Is A Termination For Convenience Clause?
- Why Would Anyone Agree to A Termination For Convenience Clause?
- Why Terminate A Contract For Convenience, Anyway?
- Payments Owed When A Contract Is Terminated For Convenience
- Limitations on The Ability to Terminate For Convenience
- Termination For Convenience vs. Deductive Change Orders
- Termination For Convenience and Far
- Related Resources
Termination for convenience is sort of like at-will employment or a prenup. When a contract is terminated for convenience, the contract is being terminated simply because one party decides to terminate the agreement. It’s not necessarily due to poor performance, and it’s not because one party breached the agreement. However, termination of convenie...
A termination for convenience clause is a clause in a construction contract that allows one or both parties to terminate the agreement without a specific reason for doing so (such as a default or breach of the contract). Termination for convenience clauses are really common in government construction contracts, but they’ve become increasingly commo...
Here’s where the prenup comparisons come in. For one, there isn’t always a choice. While the “freedom to contract” is touted for providing flexibility for businesses, the party in power (the party with the money) will often dictate the terms of the agreement. So, for a contractor or sub who doesn’t have a lot of leverage, a termination for convenie...
It’s convenient! In all seriousness, there are a variety of reasons why a customer might want to terminate a contract for convenience. For one, terminations based on mere convenience tend to be a much cleaner break than a termination for default. As mentioned in the section above, payments for work performed must be made, and sometimes the customer...
When a termination for convenience clause is exercised, it isn’t simply a “pack up your stuff and go” situation. No, there are typically costs the owner must incur in order to terminate the contract. First, the customer will still have to pay for all work performed prior to the termination. Often, a customer will also have to pay for the costs of w...
There are somelimitations on the ability to terminate for convenience – even where a clear termination for convenience clause is present. This comes from the basic principles of contracting. Both parties to a contract must enter the agreement (and execute it) in good faith and with the intention of fair dealing. So, where a customer tries to use a ...
We wrote a whole post on this topic, which you can find here: Deductive Change Order vs. Partial Termination | When the Scope of Work is Reduced If you’re really interested in this subject, you should click the link above. But here’s the short of it: termination for convenience can sometimes be done in a partial manner. Meaning, if it’s allowed und...
As mentioned earlier in the article, the origin story of the termination for convenience clause starts with the federal government. The Federal Acquisition Regulations first introduced the clause to allow the government to get out of contracts when it’s in the government’s best interest to do so. It makes sense – if the government no longer needs t...
- Matt Viator
Nov 2, 2020 · A termination for convenience clause is a contractual provision allowing one or more parties to terminate the contract “ for convenience ”, “ at-will ”, or without necessarily having a particular reason. As the name of the clause says it clearly, the termination is for “convenience”.
May 1, 2024 · Termination for Convenience of the Government (Fixed-Price) (Apr 2012) (a) The Government may terminate performance of work under this contract in whole or, from time to time, in part if the Contracting Officer determines that a termination is in the Government’s interest.
Dec 9, 2019 · General Termination for Convenience Considerations. In a fixed-price contract, the Government has the right to terminate performance “in whole” or “in part” if the Contracting Officer determines that “termination is in the Government’s interest.” See FAR 52.249-2 Alternate I (for construction).
Nov 28, 2022 · What is Termination for Convenience? A FAR termination for convenience clause, commonly referred to as a T4C, is the government’s right to completely or partially terminate a contractor’s performance of work under a contract when it is in the government’s interest to do so.
