A termination for convenience clause, or "T for C" clause, enables a party to a

contract A contract is a legally enforceable agreement between two or more parties that creates, defines, and governs mutual rights and obligations between them. A contract typically involves the transfer of goods, services, money, or a promise to tr ...

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. 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 Statutory law or statute law is written law passed by a body of legislature. This is opposed to oral or customary law; or regulatory law promulgated by the executive or common law of the judiciary. Statutes may originate with national, state leg ...

or case law which affects the operation or interpretation of such a clause.

Examples

Canada Canada is a country in North America. Its ten provinces and three territories extend from the Atlantic Ocean to the Pacific Ocean and northward into the Arctic Ocean, covering over , making it the world's second-largest country by tot ...

, the Supreme Court of Canada has recognised that good faith contractual performance is a general organising principle of the

common law In law, common law (also known as judicial precedent, judge-made law, or case law) is the body of law created by judges and similar quasi-judicial tribunals by virtue of being stated in written opinions."The common law is not a brooding omnipres ...

. This duty applies to all contracts, requiring parties to act honestly in the performance of their obligations, and therefore would operate to determine whether activation of a termination for convenience clause had been done in good faith. In

Qatar Qatar (, ; ar, قطر, Qaṭar ; local vernacular pronunciation: ), officially the State of Qatar,) is a country in Western Asia. It occupies the Qatar Peninsula on the northeastern coast of the Arabian Peninsula in the Middle East; it ...

, under Article 707 of the Qatar Civil Code, an employer has a right to terminate a construction contract at any time, and if it does so the contractor is entitled to payment for loss of profit on unperformed works.White and Case
Termination for convenience: What is the contractor entitled to?
Justin Bailey, Michael Turrini and Therese Marie Rogers, published 26 April 2017, accessed 21 April 2020 In

Singapore Singapore (), officially the Republic of Singapore, is a sovereign island country and city-state in maritime Southeast Asia. It lies about one degree of latitude () north of the equator, off the southern tip of the Malay Peninsula, bor ...

, clause 31.4(1) of the Public Sector Standard Conditions Of Contract (PSSCOC) issued by the

Building and Construction Authority The Building and Construction Authority (BCA) is a statutory board under the Ministry of National Development of the Government of Singapore. It was established on 1 April 1999 through the merger of the Construction Industry Development Board ...

allows the employer to terminate a contract "at any time" by virtue of "a written notice of Termination". The

FIDIC The International Federation of Consulting Engineers (commonly known as FIDIC, acronym for its French name ''Fédération Internationale Des Ingénieurs-Conseils'') is an international standards organization for construction technology and consul ...

Red Book 1999 contains similar provisions to the PSSCOC form. Under most of the family of JCT contracts, there is no general right to terminate without cause. In the

United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territori ...

, Part 49 of the

Federal Acquisition Regulation The Federal Acquisition Regulation (FAR) is the principal set of rules regarding Government procurement in the United States,. and is codified at Chapter 1 of Title 48 of the Code of Federal Regulations, . It covers many of the contracts issued b ...

(FAR) establishes policies and procedures relating to the complete or partial termination of contracts for the convenience of the Government, alongside making provision for termination due to the default of the contractor. When it is in the government's interest, the FAR provides for contracts to be terminated. In circumstances where there is no contractor default, the grounds for termination will be for "the convenience of the government". Termination policies for contracts for the acquisition of commercial items are covered separately in FAR 12.403, and the FAR notes that the concepts involved in such termination are different from the Part 49 concepts. Normally, where the price of the undelivered balance of the contract is less than $5,000, the contract would not be terminated for convenience but would be permitted to run to completion. In the case of '' G. L. Christian and Associates v. United States'' (1963),G. L. Christian and Associates v. the United States, 312 F.2d 418 (Ct. Cl. 1963)
accessed 28 December 2020 which gave rise to the Christian Doctrine, the US Department of the Army sought to rely on the standard termination for convenience clause outlined in the Armed Services Procurement Regulations (ASPR) even though the Army had failed to include this termination for convenience clause in the contract.

References

{{reflist Contract law