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Who is allowed to insert a Termination for Convenience Clause in a contract in Washington DC?

District of ColumbiaConstruction Contract Notice of Termination

What happens in a construction agreement entered into by a real estate agency and a construction company where the Termination for Convenience clause is inserted by the construction company, stating that construction can be halted at any time and when such happens, the real estate agency has to pay for services already provided? Does the answer change if construction company originally offered their services on discount?

2 replies

May 4, 2020

Either party may insert a clause. So long as both parties agree, there is no issue. However, many contracts are drafted in a way that might make it seem like the other party is actually the drafter (even is they are not actually the ones writing everything down and coming up with the contract). Either party can benefit. It depends how it is worded. Generally, ambiguities in the contract will go against the party drafting it. This is a doctrine known as contra proferentem. One thing to keep in mind regarding your question is an integration clause. Integration in contracts revolves around the idea that talk is cheap and anything that is not mentioned in the fully executed, final contract may not apply at all. It's difficult to see how much of this would apply without looking at your specific contract.

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May 7, 2020

Both parties to a contract are free to negotiate the terms of that contract, including a termination for convenience clause. So, either party could insert a termination for convenience clause. The terms of the particular clause will determine who's entitled to rights under the clause. It's possible that either party could have the right to terminate for convenience, but it's also possible for the clause to be one-sided, to some degree. Finally, if it's clear that the parties negotiated a discounted price in exchange for the right of the contractor to terminate for convenience - it'd be much harder to argue that the termination provisions should be ignored or tossed aside. But that shouldn't really impact the effectiveness of the clause, outright. If you're worried about a particular clause or simply would like to have a construction attorney review your contract - you can reach out to one of these Washington DC Construction attorneys and one of them may be able to help. For more discussion on construction contracts and clauses: Construction Contracts Overview, FAQs & Resources.

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