Contract Dispute: Florida Agency Attempting to Replace a Vendor at Sebastian Inlet
According to reporting from Florida Today, the Florida Department of Environmental Protection (FDEP) is attempting to remove a vendor (J&S Investment Properties LLC) over a contract dispute. The vendor operates a gift shop at Sebastian Inlet State Park, but the agency alleges that the private company has breached the contract, and now they are looking to expel them from the property in order to find a replacement vendor.
However, notably, FDEP is making the argument that the supposed breach of contract is not necessarily required for them to take action. The agency points to the fact their recently signed ten-year contract with the vendor contains a termination for convenience clause. The agency believes that they have full rights to exercise that provision.
What is a Termination for Convenience Clauses?
A termination for convenience clause is an extremely powerful contract provision. Many property owners attempt to get this type of clause inserted into their agreements. This is an issue in both Florida construction contract negotiations as well as commercial property lease negotiations.
Essentially, a termination for convenience clause allows the owner to escape from the agreement without being forced to prove (or even assert) that the other party did something wrong. A termination for convenience clause may also simply be phrased as a “termination for any reason” provisions.
The Implied Covenant of Good Faith and Fair Dealing
Still, while termination for convenience clauses are very powerful for property owners/project developers, these clauses do not give these parties free reign to simply do whatever they want. After all, if the other party to the deal could truly can back out at any time, for any reason, you would not even have an enforceable contract at all. Under the common law, contracts require both parties to give up some rights. In Florida, all commercial parties are compelled to contract with an an implied covenant of good faith and fair dealing. Even when a termination for convenience clause is inserted into the agreement, parties are still protected from bad faith contract withdrawals.
When Contact Termination is Done in Bad Faith
Termination for convenience allows the owner to escape the deal without proving misconduct by the other party. However, it is still assumed that the owner’s reason for terminating the deal was done in good faith. If it is done in bad faith, then the termination may constitute an unlawful breach of contract. For example, if a project owner decides to exercise this type of provision when a project is nearly complete, simply to avoid paying certain costs, that action would likely constitute bad faith. When that occurs, the victim may be able to seek compensation for any their financial damages, or some type of appropriate injunctive relief.
Get Business Law Help Today
At Pike & Lustig, LLP, our West Palm Beach contract litigation attorneys have helped protect the rights of many business throughout southeastern Florida. To set up your free legal consultation, please call us today at 561-291-8298 or reach out to our brand new Miami office at 305-697-9799. Our team looks forward to working with your business.