Termination of IT service contracts

It is increasingly common for governments, companies and other organisations to receive their information technology requirements under large, long-term IT service agreements (IT Contracts).  In contrast to other types of commercial agreements, the obligations of parties under IT Contracts can be both interdependent and technically complex.  Therefore, it can be difficult to assess whether a party’s behaviour or performance amounts to a breach that is serious enough to give the other party rights to terminate.

When a possible breach of an IT Contract occurs, it is important for the innocent party to carefully consider how to deal with such an event.  If the innocent party acts inappropriately, it could not only lose its rights to terminate but it might also have committed a breach itself through wrongful termination of contract.

This article explains, in the context of IT Contracts, some basic principles of termination.  In addition, it provides guidance when you believe a breach by the other party has given you a right to terminate your IT Contract.