Termination for Convenience Clauses in Building Construction and Infrastructure Contracts

8936 Words Aug 7th, 2011 36 Pages
1. Infrastructure, building and construction contracts often contain so called “termination for convenience” provisions, operating independently of breach, default or frustration. Termination of a contract has been considered as the legal consequence of certain kinds of breach, repudiation or frustration. Frustration is automatic. Breach and repudiation arise where default has occurred. 2. Provisions for termination at the convenience of, or at the will of the contracting parties, or any one or more of them, have become known as “termination for convenience provisions” (referred to in this paper as “TFC”) or “termination at will” provisions. 3. TFC can be invoked in circumstances agreed by the contracting parties (for example, at …show more content…
fifth, the provision in TFC for compensation and remedies in or arising from the TFC including remedies in the event of absence of compensation provisions in TFC. f. Sixth, conclusions.
Some History of Termination For Convenience Provisions in Contracts 7. The genesis of TFC, at least in the United Kingdom and in Australia, lay in a so called “Doctrine of Executive Necessity”. The Crown, and Statutory Corporations may contract. The power of the latter is derived from statute. Valid contracts, may, however be overridden when a conflict between a contract and the public duties of the authority becomes apparent. The power to override contractual obligations rather than capacity to contract is generally the issue. The Crown or a public authority cannot by contract be disabled from exercising their governmental powers, whether they be legislative or executive. The doctrine may have narrow application, but it exists nevertheless. 8. An application of the doctrine is in The Amphitrite, where governmental notification of the withdrawal of loading facilities and clearance for a load of coal, contrary to a prior undertaking, acted upon by the ship owners, resulted in an action in damages for breach of contract. Rowlatt J. held, that the contract was not one that damages could be sued for because “…it is not competent for the Government to fetter its future executive

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