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Ferguson Construction, Inc. (General Contractor) entered into a fixed sum contract (the Subcontract) with SAK & Associates (Subcontractor) to provide concrete materials and paving services (the Work). The Subcontract included a termination for convenience clause providing that General Contractor could terminate Subcontractor for convenience upon written notice. After Subcontractor completed 24 percent of the Work, General Contractor terminated Subcontractor. General Contractor paid Subcontractor 24 percent of the fixed contract price for the work Subcontractor actually completed.
Subcontractor sued General Contractor, alleging that General Contractor breached the Subcontract by unilaterally terminating without cause.