Preview

Termination for Convenience Clauses in Building Construction and Infrastructure Contracts

Good Essays
Open Document
Open Document
8934 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Termination for Convenience Clauses in Building Construction and Infrastructure Contracts
1. Infrastructure, building and construction contracts often contain so called “termination for convenience” provisions, operating independently of breach, default or frustration. Termination of a contract has been considered as the legal consequence of certain kinds of breach, repudiation or frustration. Frustration is automatic. Breach and repudiation arise where default has occurred. 2. Provisions for termination at the convenience of, or at the will of the contracting parties, or any one or more of them, have become known as “termination for convenience provisions” (referred to in this paper as “TFC”) or “termination at will” provisions. 3. TFC can be invoked in circumstances agreed by the contracting parties (for example, at the will of all or any of the parties; in the absolute discretion of all or any of the parties; or on the occurrence of a specified event or specified events at the behest of all or any of the parties and on notice), as can their contractual consequences (for example, payment or compensation, with or without formulae for its calculation, or no compensation at all). 4. TFC in a contract would, on one view, appear antipathetic to the formation of contractual relations. TFC have given rise to debate and will continue to do so in respect of their application, construction and consequence. If a contract is defined as no more than a legally binding promise or agreement, TFC arguably occupies the whole area of possible obligation, leaving no room for the existence of a contract at all. Further, if the essence of contract, regarded as a class of obligations, is a voluntary assumption of a legally enforceable duty, where there are identifiable parties, certain terms and consideration (unless by deed), TFC may be seen to attack the fundamental elements of a binding contract. Questions of validity for want of mutuality may arise at one end of the spectrum of possible consequences of TFC in contracts (but an argument that TFC means no

You May Also Find These Documents Helpful

  • Powerful Essays

    Bus311 Business Law I

    • 2524 Words
    • 11 Pages

    In this paper, I will reflect on the operation of contracts. Business law shows how contracts may be classified in several ways depending on the manner in which they are created, expressed, or performed. I have learned a lot from this course and I will use that to help write this paper. In the following paper I will discuss the oral or written contracts; I will discuss express or implied contracts, and will discuss formal or simple contracts. I will also discuss the impact of the contracts in a business and show the true propose of contracts. I will show what is needed in a contract to be legally enforceable. I will discuss how a contract must contain the following six elements: an offer and acceptances, a mutual agreement, a consideration, a competent parties, and legality of purpose, and proper form. All of this will be discussed in depth in the following paper.…

    • 2524 Words
    • 11 Pages
    Powerful Essays
  • Good Essays

    In order to terminate a contract because of impossibility to perform, there must be some change that makes it impossible for either the agent or the principal to perform the terms of the contract. Circumstance…

    • 369 Words
    • 2 Pages
    Good Essays
  • Satisfactory Essays

    Contracts Ii

    • 292 Words
    • 2 Pages

    According to Miller and Jentz after a contract has been made, performance may become impossible in an objective sense. (2010) Impossibility of performance may discharge the contract. If the performance is too difficult or costly due to an unexpected event then a court will consider it commercially unfeasible or impracticable. Objective impossibility is based on three types of situations that qualify for discharge of contractual obligations. The first is when a party whose personal performance is essential to the completion of the contract dies or becomes incapacitated prior to performance. The second is when the specific subject matter of the contract is destroyed. The third is when a change in the law renders performance illegal.…

    • 292 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    Easy Corp Case

    • 1216 Words
    • 5 Pages

    Including this clause permits the Government to terminate all or a part of a contract for its convenience, or for default, which signifies the Government did not think the contractor was performing adequately (BizFilings, 2012). Easy corp incomplete management reports, and invoicing problems, could constitute failure of performance to provisions of the contract.…

    • 1216 Words
    • 5 Pages
    Good Essays
  • Good Essays

    contract can be fired for good cause, bad cause, or no cause at all. In an at-will situation, either…

    • 881 Words
    • 4 Pages
    Good Essays
  • Better Essays

    Law 421 Contracts

    • 1070 Words
    • 5 Pages

    Contracts are an important part of everyday life. They are an essential part of business. As a student of a business law class, I will discuss in this paper several aspects of contracts. This paper will give a definition of a contract and the essential elements necessary to form a valid contract. It will briefly discuss breach of contract and the difference between a material breach and a nonmaterial breach of contract. Examples of legal and equitable remedies available for breach of contracts will be highlighted. Also, legal excuses for nonperformance or other grounds for discharge of contracts will be addressed. Finally, three types of common contracts personally and professionally encountered will be mentioned.…

    • 1070 Words
    • 5 Pages
    Better Essays
  • Better Essays

    Memo

    • 1081 Words
    • 5 Pages

    Doyle Contractors has clearly stated the intent not to honor its contractual obligation before the time for performance. Because of this decision Ms. Woodside has an immediate right to commence a lawsuit. What this means is that although the time for the contract is not due, Ms. Woodside does not have to wait until after April 1st 2008 to sue for breach of contract under the contract term where there has been an anticipatory repudiation. (Spagnola, Ch.10)…

    • 1081 Words
    • 5 Pages
    Better Essays
  • Better Essays

    company law

    • 1675 Words
    • 6 Pages

    Section 126(1): a company’s power to make, vary, ratify or discharge a contract may be exercised by an individual acting with the company’s express or implied…

    • 1675 Words
    • 6 Pages
    Better Essays
  • Better Essays

    Food Mart

    • 1515 Words
    • 7 Pages

    Both the business environment and the private sector use contracts as a means for agreement regarding transactions. For any contract to be legally binding four requirements must be met: 1) agreement, 2) consideration, 3) contractual capacity, and 4) lawful object (Cheeseman, 2010, p. 162). After the four requirements are met, it is the responsibility of each party involved to complete their respective obligations. Unfortunately, not all contracts will see completion. Events that arise in the course of the completion of the contract can cause breaches. Other times, one party in the contract fails in his or her obligation because of negligence. When contractual obligations cannot be fulfilled the injured party has certain rights to recover damages or force performance. In this paper the subject to address are situations that have arisen in various contractual scenarios. Based upon the contents of the contracts and causes of the contractual breaches, each scenario will address possible defenses and determine which party will win the suit along with potential remedies.…

    • 1515 Words
    • 7 Pages
    Better Essays
  • Satisfactory Essays

    If, after termination pursuant to this clause, it is determined for any reason that CONTRACTOR was not in default, the rights and obligations of the Parties shall be the same as if the notice of termination had been issued pursuant to General Condition 46, titled OPTIONAL TERMINATION.…

    • 329 Words
    • 2 Pages
    Satisfactory Essays
  • Better Essays

    Contract Disputes

    • 1248 Words
    • 5 Pages

    “CONTRACT DISPUTES REACH 15-YEAR HIGH”, was the heading of an article published, December 1, 2010 in the Government Executive. The heading in itself tells us that the government is doing more and more business by contract and as a result contractors who are lobbying for government business have become more aware of their rights to file disputes when it involves a loss of potential business. Because of this increase in disputes, the government must have a method of terminating contracts without suffering the financial liabilities that could result in millions and millions of dollars going to incomplete contracts and rebids to acquire a contractor for completion of unfinished contracts. This method of termination is known as a Default Clause which will be covered later in this paper. First we will look at a case that involves a contract dispute. The GAO file number: B-215789 which involves J.C. Hester Company, Inc who was awarded contract number: F34650-81-C-0158 with the Department of the Air Force. My reason for choosing this dispute case was because it requires that the individual look at all aspects of the case in reference to Disputes. Usually dispute cases depend on more than one aspect of the FAR. This case shows that not only the contractor but the contracting officer should pay strict attention to the reasons for the dispute. In this case knowledge of the Bids Protest Process area of the FAR is also required to determine if the recommendation by the Comptroller General was indeed valid and fair.…

    • 1248 Words
    • 5 Pages
    Better Essays
  • Good Essays

    Three Selected Clauses

    • 984 Words
    • 4 Pages

    three viable substitutions for the termination for owner convenience, delays and extension of time, and change orders clauses that have been stricken from the original contract. In this letter I will provide a comprehensive report over the three recommended clauses and discuss the reasoning behind my selections. The criteria utilized to determine the priority of the selected clauses focused on mitigating potential damages and limiting assumed liabilities. The recommended clauses are selected from general conditions section of the ConsensusDOCs 200 series referenced in ‘A Matrix of Selected Clauses In Three Standard Contracts’, per your request.…

    • 984 Words
    • 4 Pages
    Good Essays
  • Best Essays

    Immigration Reform

    • 2060 Words
    • 9 Pages

    implications and solutions." Public Contract Law Journal 36.2 (Wntr 2007): 263(14). Retrieved May 11, 2009 from General OneFile Database…

    • 2060 Words
    • 9 Pages
    Best Essays
  • Better Essays

    It is common in construction contracts to find determination clauses allowing either side to bring their contractual obligations to an end should an event specified occur due to the actions or inactions of the other. It would seem that common law determination and determination under a clause of contract are alternatives. There are differences between the processes. First, whereas common law determination depends upon repudiatory conduct or a fundamental breach, the grounds of determination specified by the contract need not exhibit these features, although frequently such will be present. Second, the remedies for common law determination are provided by law, whereas with a contractual determination the clause itself must expressly deal with the issue of remedies. Third, at common law in the face of repudiatory conduct or fundamental breach the innocent party need only indicate to the other that he accepts the breach and considers the contract discharged. Under a contractual determination clause the procedure specified must be carefully followed, failure to so may prevent a successful determination.…

    • 4500 Words
    • 18 Pages
    Better Essays
  • Good Essays

    Contingency Contracts = agreements that leave certain elements of the deal unresolved until uncertainty is resolved in the future.…

    • 1158 Words
    • 5 Pages
    Good Essays