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Under what circumstances the purchaser can terminate the contract with a supplier? Can the contract be terminated partially? If so, what will be consequences in terms of payment?

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Question added by Md Fazlur Rahman , Procurement Specialist , Engineering and Planning Consultants Ltd
Date Posted: 2016/03/20
Nadeem Asghar
by Nadeem Asghar , Supply Chain Consultant/Trainer , Independent Practitioner

Generally speaking, contracts in the world of procurement are normally irrevocable meaning thereby that these cannot be revoked by either party. However, with the consent of both parties, the contract can be terminated at any point.

Now after having said this, there are certain situations explicitly defined and agree in the contract which can lead to either party exercising its right to terminate the contract as per terms and conditions of the contract.

Another situation where a contract may be unilaterally terminated is  non performance even if this has not been listed in the contract document.

Regarding payment, this shall be governed by specific conditions of the contract on case to case basis.

Mohammed Bin Salmah
by Mohammed Bin Salmah , Procurement and Sales Engineer , Yemen Equipment & Supply - YES

If the payment terms is LC or TT you can’t terminate the contract except if the supplier can't have way to give you your goods like in war. 

If the supplier  breach any of the contract conditions such as delivery period you have the right to cancel the contract