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Understanding “termination for convenience”

On Behalf of | Jun 10, 2019 | Contract Law

Like most business owners or representatives in Houston, you likely believe that a business partner can only terminate its contract with your company if it has cause to do so. This no doubt provides a sense of security due to the assumption that as long as you fulfill your terms of the agreement, your client cannot end it prematurely (at least without incurring penalties for breach of contract). Yet many who have had that same opinion have come to us here at The Kruckemeyer Lay Firm distressed that their contractual partners are trying to terminate their agreements simply for the own convenience. As shocking as this may sound, some organizations may indeed have that right. 

According to information shared by the Congressional Research Service, government agencies are automatically afforded the right to end terminate contracts for convenience. Some of the reason one may cite for ending such an agreement with you may be: 

  • Your refusal to renegotiate the terms of your contract
  • A general breakdown in your business relationship
  • Questions regarding your company’s qualifications to fulfill the contract
  • The organization gaining the ability to provide what you offer in-house

Private companies can also cite convenience as their reasons for terminating your contract, but only if such a benefit is spelt out in the language of the contract itself. 

If a partner does elect to end your agreement for convenience, you are entitled to collect whatever is still owed to you for any work not yet paid for, as well as the expenses associated with ending your service. You can try to collect damages for breach of contract, yet you would have to prove that your partner never intended to fulfill your agreement. 

More information on enforcing your contracts can be found throughout our site. 

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