In the United States, Part 49 of the Federal Acquisition Regulation (FAR) establishes policies and procedures relating to the complete or partial termination of contracts for the convenience of the Government, alongside making provision for termination due to the default of the contractor.
[5] In the case of G. L. Christian and Associates v. United States (1963),[6] which gave rise to the Christian Doctrine, the US Department of the Army sought to rely on the standard termination for convenience clause outlined in the Armed Services Procurement Regulations (ASPR) even though the Army had failed to include this termination for convenience clause in the contract.
This duty applies to all contracts, requiring parties to act honestly in the performance of their obligations, and therefore would operate to determine whether activation of a termination for convenience clause had been done in good faith.
In the Austrian case of pressetext Nachrichtenagentur GmbH v Republic of Austria (1998), one of the issues addressed at the European Court of Justice was a clause to this effect.
The court, referring to the 1992 European Union regulations which were then current, confirmed that an indefinite term contract with an agreement not to terminate for a specified period would not be automatically considered a breach of EU rules.