answer the question attached

Single spaced type written answers of one page. Restate the question and question number before your narrative, and begin each answer a top a new page.

Answers to each question will be graded on the basis of the level to which the course material is included/addressed, and/or the robustness of arguments in support of the position taken.

Question Q13: Identify and define the three situations in which a contractual relationship may be ended early and what are the ramifications of each for either party to the contract?

Termination of the Contract – Three types

Termination for Cause / Default :

Termination for Cause (a/k/a: . . . for Default)

Generally preceded by a “breach” of the contract “Failure, without legal excuse, to perform any promise which forms the whole or part of any contract.” Simply put, a Breach occurs when the Seller fails to complete that which it has been contracted. The Buyer can terminate the contract with the Seller. AND, has the ability to recover costs incurred to remedy the breach – e.g., the Buyer can recover the cost of completing the work from the Seller when it exceeds that which was agreed to with the Seller. Damages can include any and all costs “to make the Buyer whole” with respect to their original “deal” defined in the contract.

Material Breach: The failure to perform the contract that strikes so deeply at the heart of the contract that it renders the agreement “irreparably broken” and defeats the purpose of making the contract in the first place. The breach must go to the very root of the agreement between the parties.

Anticipatory Repudiation

Anticipatory Repudiation (a/k/a: Anticipatory Breach of Contract): “The unjustifiable denial by a party to a contract of any intention to perform contractual duties, which occurs prior to the time performance is due.” Typically occurs when a Seller states that they cannot or will not or no longer has the intention to complete the contract [significantly] BEFORE they are required to finish the work.

Constructive Breach: Occurs when the party bound to perform (i.e., the Seller) disables himself from performance by some act, or declares, before the time comes (see Anticipatory Repudiation above), that they will not perform. (PPM, p.229) Again, come with the ability for the Buyer to recover damages from the seller.

Be Careful about Nested Subs and Suppliers

What about the second tier subs to a termination for Cause? Have the right to be made whole for their performance under the contract – when they did not contribute to the breach. Be careful to obtain acknowledgment of payment to subs and/or lien waivers. Costs can be recovered from the defaulting Seller.

Termination for Convenience

Typically a provision reserved for the Buyer: “Allows one party to the contract to terminate the agreement, even in the absence of the other party's fault or breach, and WITHOUT suffering the usual financial consequences of a breach of contract.” Simply put, a Termination for Convenience occurs when the Buyer UNILATERALLY decides, for any reason, to end (or not to begin) performance by the Seller of the contract. The Seller is generally entitled to a negotiated settlement for an equitable recovery of costs and losses incurred. INCLUDING reasonable profit! Originated with the Government during (after) the Civil War, HOWEVER, Termination for Convenience is seldom allowed merely to obtain a better price . . . This is considered contrary to Public Policy and inconsistent with the “Duty of Good and Fair Dealing.” BUT case law is ambiguous!

Absolute Right to Terminate

Typically a SPECIFIC within the contract defining the justification for and process for either party (Buyer or Seller) to terminate the contract : Generally triggered by some action or inaction – e.g., lack or payment, work stoppage, etc. Will require a formal Notice Period Allows for the right to Perform Theory is that Termination by Agreement should allow for a “cooling off” period – i.e., the required formal “Notice” process, as it’s in all parties best interest to find a way to continue performance under the contract.

Question 14: Which of the three generic types of procurements would you rather manage and why?

1. -Major Complexity Procurements

2. -Minor Complexity Procurements

3. -Commercial Off-the-Shelf (COTS) Procurements