This contract tip is about dealing with unknown risks when terminating a long-term contract.
Not every relationship ends well. Things may go great for a long time, and then they don't.
Terminating a long-term contract relationship has some unique challenges.
In these cases, the contract only tells part of the story. We face a lot more risk for claims based on other factors, including detrimental reliance, misrepresentation, and course of dealing.
My preferred approach in these situations is to hire an experienced litigator to do a limited early case analysis.
I hire them for a limited task to spend a set number of hours talking to my team and reviewing documentation. Then the litigator provides me an oral report of their findings.
This approach helps me get an expert view of the dangers ahead. I've found these early case analyses make all the difference in how we manage the termination process.
It helps us plan for the risks ahead. We use it to create a communication plan, to fix shortcomings in our own performance, and to ensure that how and what we communicate to the third party are consistent with our legal position.
What other considerations and advice do you have for terminating long-term contract counterparties?