What is "constructive termination?"

The fact that government agencies in Gainesville have the authority to terminate business contracts with you whenever they believe it to be in their best interests has been detailed on this blog in the past. Yet how does that process work? Typically, government organizations are viewed as being reliable partners. You would think, then, that is yours were going to end your agreement, it would give you ample notice. 

Indeed, the Congressional Research Service reports that even government payers are typically required to offer written notice in advance of terminating a contractual agreement. In such notice, the following elements should be communicated: 

  • The effective date of the termination
  • The extent of the termination (in some cases, your partner may want you to continue to do perform certain aspects of your service)
  • A notice to cease work
  • Instructions to give notice subcontractors and suppliers affected by the termination
  • Details on how to minimize the impact on your own personal (if the termination will result in a reduction to your workforce)

If no such notice is provided, then you may think you have a case for breach of contract (after all, such a failure to provide notice could be seen as operating in bad faith). However, you should also know that courts also recognize the right of "constructive termination." This may occur when a court, after review of your case, recognizes the termination of your contract as being one of convenience for your government partner. This can also occur if you and your partner fail to come to terms to continue to do work following a trial contract period, or in cases where change orders are issued that delete work that you have done that goes beyond the scope of your contract. 

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