In Rare Case Court Holds Government Termination for Default was In Bad Faith

Peckar & Abramson – All government contracts give the Federal Government the right to terminate a contract for default if the contractor fails to perform.  If the contractor’s failure to perform is excusable or the termination for default was improper, the termination usually is converted into a termination for the Government’s convenience and is not considered a breach of contract.  The contractor only can recover termination for convenience damages and not breach of contract damages. There is an exception when the termination for default is made in bad faith.