termination for convenience clause in New York

2019Condominiums ( 42 AD3d 905, 906 [4th Dept 2007]) does not support an automatic conversion of an improper termination for cause into one for convenience; indeed, the contract in that matter was terminated "without cause, pursuant to a termination for convenience clause" ( id. ).

2019Condominiums ( 42 AD3d 905, 906 [4th Dept 2007]) does not support an automatic conversion of an improper termination for cause into one for convenience; indeed, the contract in that matter was terminated "without cause, pursuant to a termination for convenience clause" ( id. ).

2015The termination for convenience clause set forth in article 28 of the parties’ subcontract is enforceable, without regard to WDF’s good faith, or lack thereof, in invoking it (see Watermelons Plus, Inc. v New York City Dept. of Educ., 76 AD3d 973 , 974 [2d Dept 2010]; Triton Partners v Prudential Sec., 301 AD2d 411, 411 [1st Dept 2003]; Big Apple Car v City of New York, 204 AD2d 109, 111 [1st Dept 1994]).

2015The termination for convenience clause set forth in article 28 of the parties’ subcontract is enforceable, without regard to WDF’s good faith, or lack thereof, in invoking it (see Watermelons Plus, Inc. v New York City Dept. of Educ., 76 AD3d 973 , 974 [2d Dept 2010]; Triton Partners v Prudential Sec., 301 AD2d 411, 411 [1st Dept 2003]; Big Apple Car v City of New York, 204 AD2d 109, 111 [1st Dept 1994]).

2015The “automatic conversion” language set forth in articles 26 and 28, providing for conversion of otherwise invalid default terminations into terminations for convenience, is clear on its face and also enforceable (see Greenfield v Philles Records, 98 NY2d 562, 569 [2002]; see also Crewzers Fire Crew Transp., Inc. v United States, 111 Fed Cl 148, 156 [2013] [construing substantially identical automatic conversion provision], affd 741 F3d 1380 [Fed Cir 2014]).

2015The “automatic conversion” language set forth in articles 26 and 28, providing for conversion of otherwise invalid default terminations into terminations for convenience, is clear on its face and also enforceable (see Greenfield v Philles Records, 98 NY2d 562, 569 [2002]; see also Crewzers Fire Crew Transp., Inc. v United States, 111 Fed Cl 148, 156 [2013] [construing substantially identical automatic conversion provision], affd 741 F3d 1380 [Fed Cir 2014]).

2009In any event, where an agency has the right to terminate an agreement without cause, the decision to terminate may not be made in bad faith and is subject to review under CPLR article 78 (Matter of RX 2000 v DeBuono, 261 AD2d 162, 163 [1999]).

2007Plaintiff met its initial burden by establishing that defendant terminated the contract without cause, pursuant to a termination for convenience clause, and defendant failed to raise a triable issue of fact in opposition (see generally Zuckerman v City of New York, 49 NY2d 557, 562 [1980]).

2007Pursuant to the termination for convenience clause, plaintiff is “entitled to receive payment for [w]ork executed, and costs incurred by reason of such termination, along with reasonable overhead and profit on the [w]ork not executed.” Although plaintiff met its initial burden by submitting evidence establishing the amount of its profits and overhead, defendant raised an issue of fact whether the profits were reasonable by submitting the affidavit of a construction expert stating that the profits claimed by plaintiff were excessive (see generally Zuckerman, 49 NY2d at 562 ).

1997(Caldwell & Santmyer v Glickman, supra, at 1582.) Bad faith in the context of a termination for convenience clause has been defined as "malicious intent” or "animus” towards the contractor.

1997(Kalvar Corp. v United States, 543 F2d 1298, 1301-1303; see, Caldwell & Santmyer v Glickman, supra, at 1581.) A discretionary matter has been characterized as a matter where the party has flexibility in exercising its discretion within an otherwise legal agreement.

1997Co. v United States, 94 F3d 1537,1540-1541 ; Maxima Corp. v United States, supra, at 1552.) Nonetheless, despite recovery limitations contained in a termination for convenience clause, a contractor may recover full breach of contract damages if it can show that the government acted in bad faith or abused its discretion in invoking the termination clause.

1997Co. v United States, 94 F3d 1537,1540-1541 ; Maxima Corp. v United States, supra, at 1552.) Nonetheless, despite recovery limitations contained in a termination for convenience clause, a contractor may recover full breach of contract damages if it can show that the government acted in bad faith or abused its discretion in invoking the termination clause.