The Procurement Glossary » Termination for Convenience
Termination for Convenience
Contracts & Legal
Definition
A contractual right to end an agreement without the other party being at fault, usually with notice and sometimes a fee.
Explanation
This clause gives the buyer flexibility to exit if needs change, independent of performance. Suppliers price the risk, and the clause typically requires notice and compensation for committed costs.
Example
Restructuring its operations, the buyer invokes termination for convenience with 90 days' notice.
Related terms
- Termination for Cause — Ending a contract because the other party has materially breached it, usually after a chance to remedy the breach.
- Auto-Renewal Clause — A contract term that automatically extends the agreement for a further period unless a party gives notice to cancel by a deadline.
- Exit Plan — A pre-agreed plan for winding down a supplier relationship smoothly, covering handover, data and continuity of supply.
- Contract — A legally binding agreement between buyer and supplier setting out what will be supplied, at what price and on what terms.
Frequently Asked Questions
What is Termination for Convenience?
A contractual right to end an agreement without the other party being at fault, usually with notice and sometimes a fee. This clause gives the buyer flexibility to exit if needs change, independent of performance. Suppliers price the risk, and the clause typically requires notice and compensation for committed costs.
Can you give an example of Termination for Convenience?
Restructuring its operations, the buyer invokes termination for convenience with 90 days' notice.
Back to the procurement glossary | Procurement concepts | Contact us