About the Course
Introduction
This CLE webinar will advise construction attorneys on the use of termination for convenience (TFC) clauses in contracts. The panel will discuss the methods of providing notice of such terminations, how to calculate damages, and how contractors can mitigate risks when entering into agreements with a convenience clause. The panel will address best practices for all stakeholders when considering this type of provision in a construction agreement rather than a TFC clause.
Description
In contracts, there are essentially two types of termination clauses. The most common clause is termination for cause, also known as a termination for default, which most contracts contain. The second type is TFC and outside of these clauses, the only way for a party to exit a contract is to breach the contract.
A TFC clause is a clause within a contract allowing the parties' contractual relationship to mirror that of at-will employment. In other words, it allows a party, or parties, to terminate a contract for almost any reason.
While technically a party does not need a reason to terminate a contract for convenience, there are some limitations in the capacity to exercise the TFC clause. The main limitation concerns the parties' good faith. In effect, all parties must enter the contract in good faith with the intention of fulfilling the contract. If a party terminates the contract to avoid making the final payment or it always intended to terminate the contract, the party will likely be held liable for breaching the contract.
Typically, after a contract has been terminated for convenience, the terminated party is entitled to payment for work it completed, costs it incurred due to the termination of the contract, reasonable profit and overhead on work that has yet to be executed, and anything else stipulated in the contract. These entitled costs are meant to disincentivize parties from terminating their contract for trivial reasons.
The terminated party is also deprived of the opportunity and contractual right to fix, or cure, any defective work; thus, the terminating party is unable to recover any costs associated with repairing the damaged work. If a party desires to withhold payment for defective work, they can go the traditional route of terminating the contract for cause/default. However, if the parties have contractually agreed that the cost of repairing defective work can be offset, a court will uphold that contractual agreement.
Listen as our expert panel of construction attorneys discusses how to best utilize a TFC clause in contracts. The panel will discuss how notice is provided and how damages are calculated when using these types of provisions.
Presented By
Mr. Brill is a member of the Construction and Infrastructure Practice Group. He focuses his practice on complex commercial and construction litigation. In that role, Mr. Brill has represented owners, developers, general contractors, and subcontractors in oil-and-gas disputes, design-defect claims, and public procurement matters in state and federal court, and various administrative boards. He has also regularly represented clients in complex commercial litigation involving breaches of contract, fraud, various consumer protection acts, employment matters, and business tort claims.
Mr. Richey’s legal practice is concentrated in the areas of dispute resolution with an emphasis on the construction and engineering industry, complex commercial disputes, energy disputes, and state and local bid protests. For almost a quarter century, he has focused his energy on winning litigations, arbitrations, and mediations for his clients. During this time, Mr. Richey has worked on local engagements as well as matters in over 35 different states, Asia, Africa, Europe, Australia, and South America representing companies both large and small.
Mr. Wickard is a construction lawyer, concentrating his practice on dispute resolution, construction contract negotiation, and public procurement. He has a very active procurement practice, handling local, state, and federal bid protest proceedings throughout the country and advising clients on a multitude of issues that arise during and after the procurement process. He also has familiarity with public records and sunshine acts and routinely assists clients obtain public records or maintain the confidentiality of their own information submitted to public agencies. Mr. Wickard’s litigation practice includes representing clients in disputes subject to arbitration, before a number of state and federal courts and before government agencies with respect to a wide variety of matters. He has extensive construction litigation experience and has represented owners, contractors, subcontractors, suppliers, engineers, and architects in various disputes involving scheduling, delay, inefficiency claims, defective work, mechanics’ liens, prompt payment claims, bond and insurance claims. Mr. Wickard also has a very active construction transaction practice. He drafts, negotiates and advises on all types of construction and design contracts. He has extensive experience with all AIA contract forms. He has drafted and negotiated numerous construction and design contracts for a wide variety of domestic and international projects.
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This 90-minute webinar is eligible in most states for 1.5 CLE credits.
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Date + Time
- event
Tuesday, June 24, 2025
- schedule
1:00 PM E.T.
- Termination for convenience
- Good faith
- Notice
- Damages
- Right to cure or fix
- Best practices for termination for convenience vs. termination for cause
The panel will address these and other key topics:
- How do the parties determine if the terminating party is acting in good faith?
- What type of notice is typical in a TFC clause?
- How can risks be mitigated in contracts with TFC clauses?
