Seth's letter about Sean Reitmeyer
This concept first appeared in connection with federal government projects. The theory used by courts was that the public interest was not served by requiring the government to either build something it no longer needed or pay damages for not doing so, if in fact there was a compelling sovereign reason to stop. The courts reasoned it didn’t serve the public interest to force the government to continue a project that became unnecessary or otherwise unusable because, for example, a war ended or hazardous materials were found on a site.
The typical T for C clause provided that the owner would pay costs incurred to date and reasonable termination expenses, meaning unavoidable costs incurred due to an early termination (i.e., un-cancelable material orders, restocking charges, un-expired rental contracts).
Currently, nearly all public contracts, standard form construction contracts and even stand-alone contracts, now contain termination for convenience clauses.
In Seth's case, his costs exceeded the contract amount, thereby allowing for 100% of the contract funds, even though technically none of the work was physically performed.
This is pretty rare, but makes for a sexy headline when it happens.