Key Points:
Whether a principal is entitled to terminate a contract
for convenience may depend on whether a term of good faith is
implied into the contract.
Construction contracts often contain provisions enabling
termination for "convenience", generally allowing the
principal to terminate the contract at will, even where the
contractor has not done anything wrong.
A question that often arises in disputes concerning termination
for convenience clauses is whether the principal is entitled to
terminate the contract when it suits him, for any reason, or no
reason at all? In short, is there any fetter on a termination for
convenience right? There is no common law right to terminate for
convenience. The starting point to examining this question is the
termination for convenience clause itself: does the clause
prescribe a limit in any way on the basis in which the termination
for convenience right may be exercised? It is commonplace for such
clauses to require written
