Entering into a business contract with a new partner in Dallas brings some welcome security to you and your organization. That feeling of security may quickly evaporate, however, if the fear of that client walking away from the agreement at any time arises.
How can a contracted partner terminate a business agreement without cause? There are circumstances where a company can end a contract for its own convenience.
Who can terminate contracts for convenience?
The authority to terminate a contract for convenience is typically only a privilege afforded during contract negotiations. While conceding such a right to your partner might seem to hamstring your company, you may choose to include it as a bargaining chip in order to secure the services of a well-renowned client. In any other circumstance, a private company has to have cause to prematurely end a contract with you.
That is not the case with government agencies. According to the Congressional Research Service, they are automatically endowed with the right to walk away from a contract at any time. At first glance, this may seem like a deterrent from working with government partners. However, the stability that a partnership with such an entity offers is often seen as an offset to that risk.
Collecting your dues following a premature contract termination
If you do have a contract terminated prior to its completion (and your partner has lawfully cited termination for convenience), you are typically entitled to only the costs for the goods and/or services your organization has thus far rendered. If there are any expenses associated with ending your services early, you may press for those as well. However, damages for breach of contract may only be available to you if you have evidence that your partner never intended to complete the terms of the contract in the first place.