What must contractors do immediately upon termination for convenience?

Upon termination for convenience, the contractor is required to stop all work immediately. This requirement is rooted in the nature of the termination for convenience clause, which allows the contracting party to terminate the contract without cause. This action is taken to prevent any further obligations or expenditures from both parties once the decision to terminate has been made.

Ceasing work ensures that the contractor does not incur additional costs or commitments after the termination notice is issued. It also allows for an orderly wind-down of the project, preventing any potential disputes regarding unfinished work or incurred costs beyond the point of termination.

While notifying stakeholders, submitting earnings reports, or completing all pending tasks may be necessary steps as part of contract closeout procedures, they do not take precedence over the immediate obligation to stop all work upon receiving a termination notice. This priority on halting work reflects the essence of the termination for convenience process, focusing on minimizing further obligations and protecting both the contractor's and the client's interests following the decision to terminate.