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Collecting after contracts are terminated for convenience

| Jun 17, 2019 | Business Law And Litigation |

Securing a business contract with a government agency can be a boon for your business in Long Beach. Such organizations tend to be much more secure and stable than private companies. Yet at the same time, they are afforded special privileges, such as the right to terminate contracts for their convenience rather than needing to have actual cause. Many clients have come to us here at Russell Mirkovich & Morrow after having agreements ended in such a way distraught at the prospect of losing out on the value of their contracts. If you face the same situation, you should know that you are still entitled to compensation for your services. 

According to the Congressional Research Service, some of the common reasons cited by government agencies for terminating contracts for convenience include: 

  • No longer needed the products or services addressed in the contract
  • The contracted partner’s unwillingness to renegotiate its terms
  • Issues with the contracted partner’s performance
  • The contracted partner becoming ineligible to hold the contract
  • A deterioration with the relationship with the contracted partner
  • The agency gaining the ability to supply the products or services in-house

If your government partner cites any of the aforementioned reasons (or others) as justification for ending your agreement, it still must pay you for whatever services you have already rendered. If there are any costs associated with ending your service, it must cover those as well. 

You might also be able to seek damages for breach of contract. To do so, you will need to provide evidence that shows that the agency negotiated its contract with you in bad faith, and never had any intention of allowing the agreement to be completed. You can learn more about enforcing your contracts by continuing to explore our site.