Termination for convenience: Difference between revisions
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==Differences between Termination for convenience and Termination for cause== | ==Differences between Termination for convenience and Termination for cause== | ||
Termination prerequisites of the contract are usually classified into a termination for cause and termination for convenience. | Termination prerequisites of the contract are usually classified into a [[termination for cause]] and termination for convenience. | ||
* '''Termination for convenience''' essentially enables a participant to terminate a contract simply because it no longer satisfies their expectations. | * '''Termination for convenience''' essentially enables a participant to terminate a contract simply because it no longer satisfies their expectations. | ||
:Generally, the '''seller''' will not be allowed to terminate for convenience by the '''purchaser'''. '''Buyers''' usually insist that only they are allowed to terminate for convenience. The fundamental negotiating points for these are the amount of notice provided if the '''purchaser''' terminates for convenience and details around unwinding the contract. The important problem in most negotiations on termination clauses is the question of compensation. Regarding termination for convenience, the [[supplier]] is usually looking to recover all of its costs and as much actual or anticipated [[profit]] as possible. The '''purchaser''', on the other hand, is interested to protect their interest and minimize [[risk]] in cases of termination for default by the [[supplier]] <ref> V. Haren 2011, p. 299 </ref> | :Generally, the '''seller''' will not be allowed to terminate for convenience by the '''purchaser'''. '''Buyers''' usually insist that only they are allowed to terminate for convenience. The fundamental negotiating points for these are the amount of notice provided if the '''purchaser''' terminates for convenience and details around unwinding the contract. The important problem in most negotiations on termination clauses is the question of compensation. Regarding termination for convenience, the [[supplier]] is usually looking to recover all of its costs and as much actual or anticipated [[profit]] as possible. The '''purchaser''', on the other hand, is interested to protect their [[interest]] and minimize [[risk]] in cases of termination for default by the [[supplier]] <ref> V. Haren 2011, p. 299 </ref> | ||
* '''Termination for cause''' - force majeure circumstances that make normal performance impossible and termination for bankruptcy or non-payment are one of the provisions that allow the seller to terminate. | * '''Termination for cause''' - force majeure circumstances that make normal performance impossible and termination for bankruptcy or non-payment are one of the provisions that allow the seller to terminate. | ||
:Generally, it is needed to negotiate termination provisions to address those situations, when there are specific circumstances outside the '''seller's''' control that will make it impossible to complete. '''Retailers''' in a standardized services [[environment]] may also have rights to terminate in end-of-life situations where support parts are no longer available or where software is not being kept up to date by the '''purchaser''' with revision levels and bug fixes. | :Generally, it is needed to negotiate termination provisions to address those situations, when there are specific circumstances outside the '''seller's''' control that will make it impossible to complete. '''Retailers''' in a standardized services [[environment]] may also have rights to terminate in end-of-life situations where support parts are no longer available or where software is not being kept up to date by the '''purchaser''' with revision levels and bug fixes. | ||
Revision as of 22:21, 20 March 2023
| Termination for convenience |
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| See also |
Termination for convenience - the circumstance, when the party is allowed to the ability to complete the arrangement even before all contemplated operations and responsibilities are performed (or before the session has terminated), even if there has been no infringement, as long as the terminating contractor provides acquaint and compensates for what has transpired to date [1].
Termination for convenience in regulations
Termination for convenience is neither expressly commissioned nor proscribed by the regulations or standard default conditions as an alternative to a termination for default, the language of the Court of Claims in Schlesinger v. the United States, 182 Ct. C1. 571, 390 F.2d 702 (1968), emphasizing the discretionary nature of the declaration to default terminate, arguably authorizes the contracting magistrate to terminate for convenience instead of default where an entrepreneur is unpardonably in default. However, the Armed Services Board has pronounced that the regulations prohibit the contracting officer from terminating for convenience where the freedom to terminate for default exists [2].
Differences between Termination for convenience and Termination for cause
Termination prerequisites of the contract are usually classified into a termination for cause and termination for convenience.
- Termination for convenience essentially enables a participant to terminate a contract simply because it no longer satisfies their expectations.
- Generally, the seller will not be allowed to terminate for convenience by the purchaser. Buyers usually insist that only they are allowed to terminate for convenience. The fundamental negotiating points for these are the amount of notice provided if the purchaser terminates for convenience and details around unwinding the contract. The important problem in most negotiations on termination clauses is the question of compensation. Regarding termination for convenience, the supplier is usually looking to recover all of its costs and as much actual or anticipated profit as possible. The purchaser, on the other hand, is interested to protect their interest and minimize risk in cases of termination for default by the supplier [3]
- Termination for cause - force majeure circumstances that make normal performance impossible and termination for bankruptcy or non-payment are one of the provisions that allow the seller to terminate.
- Generally, it is needed to negotiate termination provisions to address those situations, when there are specific circumstances outside the seller's control that will make it impossible to complete. Retailers in a standardized services environment may also have rights to terminate in end-of-life situations where support parts are no longer available or where software is not being kept up to date by the purchaser with revision levels and bug fixes.
On the buyer's side there often is a longer list of events that allow the purchaser to terminate the contract. These revolve around failure by the supplier to perform, bankruptcy or change of control of the supplier, and other circumstances that compromise a material default from the perspective of the buyer. All scenarios that the buyer's team will lead to wanting to terminate the agreement and guarantee that these are addressed in the contract will be wanted to be carefully considered by them [4].
Termination for convenience in nonprofit
Reserving the advantage of termination for convenience encourages nonprofit organizations undertaking innovative or experimental ventures, and also provides flexibility in longer-term arrangements for which funding has not been enough secured or budgeted [5].
References
- Cibinic J., Jr., C. Nash R., F. Nagle J. (2006) Administration of Government Contracts CCH Incorporated, p. 963
- Haren V. (2011) Contract and Commercial Management - The Operational Guide International Association for Contract and Commercial Management(IACCM), p. 299-300
- J. Battersby G., W. Grimes C., T. Nuara L. (2010) Drafting Internet Agreements, Second Edition Aspen Publishers Online
- Rosenthal L. (2011) Good Counsel: Meeting the Legal Needs of Nonprofits John Wiley & Sons, p. 71
Footnotes
Author: Klaudia Wojtas
