Contract Termination For Convenience In San Antonio
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FAQ
A form notice governed by Texas law terminating an agreement early for convenience. This notice may be used by a party to unilaterally terminate an agreement for convenience under the terms of that agreement.
Parties may agree to include a termination for convenience clause in a contract under the freedom of contract principle. However, in some countries and legal jurisdictions they may be statute law or case law which affects the operation or interpretation of such a clause.
Unlike a termination for cause, a termination for convenience occurs without a breach of contract. Basically, one party decides that they've had enough and want to walk away. It's not technically legal, unless the contract gives either party the right to do this, but it does occur in the construction industry.
A “termination for convenience” clause states that a property owner may terminate a contractor at its convenience for no reason at all. There does not need to be any breach of contract in place. However, the clauses typically require advance notice (such as 30 days).
Termination for Convenience. Either party may terminate this Agreement without cause and at any time upon giving 30 days' prior written notice to the other party (each, a termination for "Convenience"). Such termination will be effective on the date stated in the notice.
The answer is additional termination costs and damages. Where a termination for convenience of the government is found to be a breach of the contract due to bad faith or an abuse of discretion, contractors may be able to recover anticipatory profits and consequential damages.
Unilateral Right to Terminate Without Cause: Termination for convenience clauses generally allow one party, often the government entity, to terminate the contract without needing to establish fault or breach by the other party.
Ensure Proper Grounds for Termination Common grounds for this sort of action include a breach of the contract terms, changes in business circumstances, or non-performance of the breaching party. Be sure that the grounds for termination are legally sound and appropriately documented.
A termination for convenience clause, or "T for C" clause, 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.
There are some limitations on the use of a termination for convenience clause. The primary limitation is that all contracts include an implied covenant of good faith and fair dealing. Essentially, this covenant prohibits the parties to a contract from acting in bad faith.
