Reg. 73 (PCR 2015)

Termination of contracts

In: Manage > Closing the contract

Overview

This regulation places an obligation on contracting authorities to ensure that every public contract incorporates certain termination rights. This includes situations where the contract has been subject to a substantial modification which would have required a new procurement procedure in accordance with regulation 72 PCR 2015 (modification of contracts during their term), or where, at the time of contract award, the supplier should have been excluded from the procurement for meeting one or more grounds for exclusion.

The regulation also provides that the contract provisions may set out the basis on which the mandatory termination rights shall operate e.g. by providing a notice of termination and by addressing consequential matters that will or might arise from the termination.

To the extent that a public contract does not include the termination rights required under this regulation (i.e. regulation 73), these rights must be treated as implied terms of the contract and may be exercisable on the contracting authority giving reasonable notice to the supplier.

Objective at this commercial stage

To the extent that it becomes necessary to terminate the contract as a result of one or more of the situations under this regulation (i.e. regulation 73(1)), contracting authorities should ensure that termination takes place in accordance with the provisions stipulated in the contract.

Key considerations at this commercial stage

Contracting authorities should:

  • ensure that termination in connection with the situations under this regulation (i.e. regulation 73(1)) is conducted in accordance with the provisions stipulated in the contract.

See also in the Procurement Act 2023:

  • Section 78: Implied right to terminate public contracts
  • Section 79: Terminating public contracts: national security
  • Section 80: Contract termination notices

Additional support and guidance

Make sure you:

  • read the regulation
  • seek legal and commercial advice in the context of specific procurements