Castro & Associates Construction Trial Lawyers

Understanding "termination for convenience"

The contracts that you hold with various partners in Los Angeles not only guarantee you work but also stability for your company. It is easy to understand, then, why you would be upset were a contracted partner to simply walk away from your agreement. Typically, one would have to cite cause in order for ending its contractual agreement with you. Some organizations and companies, however, may say that they are allowed to terminate their contract for their convenience. Many have come to us here at Castro & Associates questioning if this is even allowed, and if so, what are they entitled to collect if a partner ends their agreement in such a way. 

The concept of "termination for convenience" does exist and is indeed valid, yet it is not a benefit that is automatically extended to all companies. Per the Congressional Research Service, government agencies are automatically given the right to terminate a contract for convenience whenever they enter into an agreement with you. Private companies, on the other hand, must negotiate to include such a benefit in their contracts. 

In the event that a government agency that you are partnered with does exercise this right, it can do so either completely or partially. With a complete termination, you would cease all work and in turn be entitled to collect for work your had already done yet had not yet been paid for, as well as whatever costs may be associated with ending your services (cleanup, transportation, etc.). In a partial termination, you would again be entitled to collect for work done, as well as additional compensation (either in time or resources) to amend your services according to your now revised contract. 

You can learn more about dealing with contract disputes by continuing to browse through our site. 

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