No-Fault Outsourcing Contract Termination


    Attorney John Gleidman is writing a new column for Computerworld, and his first one addresses relationships gone bad — like the one between Sears and CSC.

    Here’s a useful idea: “Every contract should have several ways for the parties to end their relationship.” That way, even if there’s no material breach, the organizations can get out of the agreement even for convenience’s sake.

    I suppose this is akin to no-fault divorce. And like no-fault divorce, one or another party can still end up paying. As Mr. Gleidman writes, “Contracts containing termination-for-convenience clauses often provide for a payment to the nonterminating party if a termination takes place — that is, where the parties can agree on a buyout of one of their future obligations to pay under the contract and otherwise fix the parties’ obligations.”

    At any rate, the rest of the column does a good job of persuading the reader that you’d better have a qualified attorney draw up the contract.