A contract the customer can walk away from on notice is worth what the termination payment covers. Lenders size debt and set prepayment terms around it, and buyers discount it.
Across the 3 regimes
United Kingdom
MOD standard terms give a break right on notice (20 business days in the Innovation Standard Contract), with an indemnity for unavoidable loss capped at the contract price. The Act adds an implied right to terminate on exclusion grounds.
United States
FAR 52.249-2 (fixed price) and 52.249-6 (cost reimbursement). Costs plus a reasonable profit on work done, capped at the contract price.
EU and NATO
Not harmonised by the Directive. Set by national law and the contract.
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Related
General information on public law and standard terms as at 28 Oct 2026, not legal advice on any contract or transaction. Quoted wording is checked against the official text linked to it.