Those executives and business owners in Indiana that work contractually with partners likely feel a good deal of security due to the nature of these professional relationships. Indeed, they likely assume that their partners can only end their agreements if failures on their part give those partners cause to do so.
Yet is that actually the case? A legal principle exists known as “termination for convenience” which essentially allows contracted parties to walk away from those contracts when they believe it to be in their best interest to do so. The question then becomes is when can a company exercise this right?
Government agencies vs. private entities
According to the Congressional Research Service, government agencies may exercise the right to end a contract for their convenience at any time (and in any scenario). This may prompt some to wonder why a private company would want to work with such a partner. The answer is that such entities typically offer a good deal of security (given their supporting institutions), thus making the potential of having a contract ended at any time seems worth the risk.
Private entities, however, can only end a contract at their convenience if their partners conceded that right to them during contract negotiations. Without such a benefit, these entities might face accusations of breach of contract should they try to walk away from an agreement.
Breach of contract against a public partner?
Pursuing a breach of contract claim against a public agency might also be a possibility even with such an agency’s automatic entitlements. Should one be able to show that their government partner initially negotiated a contract in bad faith (never intending to allow its completion), then they may face civil penalties.