The issue of terminating contracts for convenience has been detailed on this blog in the past. Yet as has been explained in said details, this is a benefit that is not automatically afforded to every organization or individual. Indeed, unless your contracted partner is a government agency, they can only terminate a contractual agreement with you if they have legitimate cause to do so (unless the right to terminate it for their convenience is afforded to them per the terms of your contract).
This then prompts the question of what legal recourse is available to you if they end your agreement without cause. In such a scenario, you may be entitled to damages due to breach of contract. According to the Judicial Education Center, there may be two types of damages available to you in such an action. The most common is compensatory damages. These are meant to cover the costs (both monetary and in man-hours) that you and your organization incurred up to the point of the contract’s termination. Compensatory damages are also designed to pay you for any expense that accumulates from you having to discontinue your services, which can include the cost of any resources purchased for the execution of the contractual services yet not yet used.
The second type of damages available to you in a breach of contract case are punitive damages. These are meant to punish your former partner for not fulfilling the contract. These are less commonly awarded than compensatory damages due to you typically needing to prove that your former partner acted negligently or in bad faith and that your organization suffered harm as a result of the breach.
