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What is “termination for convenience?”

| Jun 3, 2019 | business disputes, Firm News |

Have you had a business partner that has abruptly chosen to end your professional relationship in Geneva? In such a scenario, you typically expect to be given the reason behind their change of heart. Hearing that the now-former partner simply believes it to be in their best interests to do so can be a bitter pill to swallow, and one that might prompt you to question whether that is even allowed under the law. In most cases, a partner has to have cause to end a contractual agreement with you. Can one actually end a contract for convenience?

It depends on the type of company that you are working with. According to the Congressional Research Service, government agencies are automatically afforded the right to end contracts for convenience. If such a partner chooses to do so, you can typically only collect that money that is owed to you for the services you have already rendered (you may also be able to be compensated for the expenses associated with ending your service). Damages for breach of contract are only an option if you can somehow prove that the agency never intended to fulfill its agreement, thus allowing you to claim that it operated in bad faith.

Private organizations are usually only allowed to end a contract for convenience if that benefit is extended to them in the contract they have with you. Even in such a situation, it is best for you to stipulate what those conditions may be. Doing so limits them to only getting out of the agreement in certain scenarios, which effectively nullifies the benefits that termination for convenience offers in the first place.

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