Opinion ID: 1652082
Heading Depth: 1
Heading Rank: 4

Heading: change of circumstances in the university's contract

Text: The University argues that the MAC litigation, the issuance of the Temporary Restraining Order, and the Agreed Order each provided the necessary substantial change in circumstances to justify a termination for convenience of its contract with RAM. We disagree. Neither the MAC litigation nor the Temporary Restraining Order was sufficient to justify a termination for convenience. Although the litigation may have eventually delayed construction of the stadium beyond the construction deadlines, and may have resulted in an increased cost, neither event had yet occurred. In fact, construction was not delayed because RAM rebid and resumed work in good faith. Further, Article 24(A)(2) of the bid contract provided for the possibility of a court-ordered construction delay by stipulating that such a delay for a period of up to 90 days shall not constitute cause for termination. While interpretation of Article 24(A)(2) is not necessary to reach a decision in this case, its inclusion in the contract illustrates the parties' anticipation of possible legal delays without suggesting that the University could terminate in the event of such a delay. Similarly, the Agreed Order cannot be considered a substantial change justifying the University's termination of the contract, because the University itself is responsible for it. If the government can exercise a termination for convenience clause based on a situation the contracting officials themselves are responsible for, the clause becomes merely an exculpatory provision. Stephen N. Young, Limiting the Government's Ability to Terminate for its Convenience following Torncello, 52 Geo. Wash. L.Rev. 892, 903 (1984). Relying on circumstances the University itself created simply is not grounds for termination under the changed circumstances standard. The lower courts agreed that, while the effect of the TRO may have been to merely delay construction, the effect of the Agreed Order was to terminate the contract. We are of the opinion that to reason that termination of the contract justified terminating the contract illustrates the absurdity of allowing the University's own actions to justify the termination for convenience. The MAC litigation, the Temporary Restraining Order, and the Agreed Order did not change the circumstances of the bargain or the expectations of the parties significantly enough to justify termination of the University's contract with RAM. Torncello, 681 F.2d at 771. The Court of Appeals' opinion affirming the summary judgment of the Franklin Circuit Court is therefore reversed and we remand this matter to the Franklin Circuit Court for further proceedings in accordance with this opinion. KELLER, STUMBO, and WINTERSHEIMER, J.J., concur. JOHNSTONE, J., dissents in a separate opinion in which LAMBERT, C.J., and COOPER, J., join.