Introduction
Ending ones obligation under contract may vary depending on whether the contract is being terminated for the government’s convenience or due to the contractor’s fault with government terminating when the need arise regardless of the faults committed by the contractor.
The government has contractual rights to terminate a contract for default when the purported contractor fails to perform within the specified time in contract, deliver supplies or make any progress concerning the contract The contracting officer in the best interest of the government terminate the contract governed by government regulations like federal acquisition regulation or code of regulation for state contracts for example Krygoski Construction Co., Inc. v. United States, a 1996 case. The government must give intention notice of termination when the contractor is not performing in attempt to make negotiations for settlements according to (FAR –subpart 49.5., 2012)
The private sector have non contractual rights and can only pull out when sure of frustrations or repudiated breach like refusing to perform, denied access to site and abandonment. The termination process is regulated by principles of central law depriving the contracting party the power to terminate like the power given to government agencies like federal, local or state agencies. The private sector purely relies on principles of contract law outlining if termination can be enforced and valid pursuant to termination clause. For convenience, the private sector applies the principle of good faith and fair dealings insinuating that the owner of project may terminate contracts complying with the implied obligations of good faith and fair dealings constraining them freedom to contract. This implies that there is no termination to reclaim lost opportunities, the private sector may not terminate at their convenience to avoid inconvenient court battles as their decision is challengeable before courts for example in Harris Corp. v. Giesting & Assoc., Inc. (2002).
The assumption that the government can terminate any contract is agreeable since government holds monopoly on the contractual rights of termination for convenience and can convert any breach or fault when the change clause is inappropriate. This is because the convenience clause gives the government right to unilaterally pull out of contract with out proving that the other party has committed a breach and with prime contracts being interpreted to have the clause if even if it’s not referenced in the contractual agreement hence the most appropriate course of action the government can take. The government may terminate for default but be treated for convenience of government to evade financial consequences of breach.
There is need for basic contracts to encompass mutual exchange of promises from contracting parties .this calls for standardization of contract provisions to implement mutual statutory conditions concerning terminations, payments, specifications, contract changes tastings and inspections.
References
IN THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT (2002) HARRIS CORPORATION, versus GIESTING & ASSOCIATES, INC.,
Subpart 49.5(2012)—Contract Termination Clauses, retrieved from http://acquisition.gov/far/current/html/Subpart%2049_5.html
UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT
95-5136, KRYGOSKI CONSTRUCTION COMPANY, INC., V THE UNITED STATES retrieved from http://www.ogc.doc.gov/ogc/contracts/cld/rd/courts/Krygoski.html
