When a contract is terminated, the parties are relieved from further unperformed obligations in accordance with the
agreed terms and conditions. A contract may be terminated under distinct processes: Termination for Convenience
and Termination for Default.
Termination for Convenience
A termination for convenience, also known as no-fault termination, allows the agency to terminate any contract, in
whole or in part, at any time in its sole discretion, if it is determined that such termination is in the best interest of the
• The agency shall provide the contractor with written notice specifying whether the agency is terminating all or
part of the contract. The notice of termination shall give the date of termination. If the contract is being
selectively terminated, the agency should specify which part(s) of the contract are being terminated.
• A termination notice should be issued which includes wording similar to:
Pursuant to Section ___, Termination, this contract is hereby terminated effective [date]. [Contractor name] is directed to
immediately stop all work, terminate subcontracts, and place no further orders.
In accordance with this Notice of Termination, you shall:
1) Keep adequate records of your compliance with this notice, including the extent of completion on the date of termination.
2) Immediately notify all subcontractors and suppliers, if any, of this Notice of Termination.
3) Notify the agency Contract Administrator [name], of any and all matters that may be adversely affected by this
4) Take any other action required by [agency name] to expedite this Termination.
• The contractor will generally be paid for allowable costs incurred up to the termination. The agency will not
be liable for payment to the contractor related to the terminated portion of the work or any work performed
or costs incurred after the effective date of termination.
• Upon receipt of any invoice from the contractor for work performed prior to the Notice of Termi