Part 4: Management of public contracts Terminating public contracts Section 78: Implied right to terminate public contracts
Subsection (1) sets out that in every public contract, it is an implied term that the contracting authority can terminate the contract if a termination ground applies.
	Subsection (2) sets out the termination grounds. Those grounds being where: (a) the contract was awarded or modified in material breach of the Act or any regulations made under it; (b) the supplier has, since the award of the contract, become an excluded supplier or excludable supplier, including due to a person that the supplier is relying on in order to satisfy the conditions of participation); (c) a sub-contractor to which a supplier is sub-contracting all of or part of a contract is an excluded supplier or excludable supplier.
	Subsection (3) sets out that the termination ground in (2)(c) cannot be used unless the contracting authority requested information under section 28(1)(a) (information about sub-contractors) in relation to contract award and subsection (4), (5) or (6) applies.
	Subsection (4) applies if, before awarding the contract, the contracting authority was not aware that the supplier intended to sub-contract all or part of the contract.
	Subsection (5) applies if the sub-contractor is an excluded or excludable supplier under section 57(1)(b) or (2)(b) (the debarment list), and before awarding the contract the contracting authority sought to determine if the sub-contractor was an excluded or excludable supplier on the debarment list, but did not know that it was.
	Subsection (6) applies if the sub-contractor is an excluded or excludable supplier (under 57(1)(a) or (2)(a)) and the contracting authority requested information about the sub-contractor as part of the competitive tendering procedure, but before awarding the contract did not know if the sub-contractor was an excluded or excludable supplier.
	Subsection (7) sets out that before terminating a contract by reference to the implied term in section 78 a contracting authority must notify the supplier of its intention to terminate, specify which termination ground applies and set out why the authority has decided to terminate the contract. Contracting authorities must also give the supplier a reasonable opportunity to make representations about whether a termination ground applies, and the authority’s decision to terminate.
	Subsection (8) sets out that before terminating a contract under subsection (2)(b) or (c), the contracting authority must give the supplier a reasonable opportunity to bring the sub-contract with the excluded or excludable sub-contractor to an end and, if necessary, replace them with an alternative suitable sub-contractor.
	Subsection (9) permits a public contract to contain provision about restitution and other matters ancillary to the termination of the contract by reference to the implied termination grounds.
	Subsection (10) prohibits the parties from using contractual terms to restrict or override the implied term that a contract can be terminated by a contracting authority if a termination ground applies.
	Subsection (11) clarifies that references to a supplier becoming an excludable supplier in the section includes where the relevant discretionary exclusion ground did not apply before the contract was awarded or, if it did apply before award, it applied by reference to a different circumstance and the supplier has since become subject to the ground as a result of new circumstances (such as a different episode of poor performance or professional misconduct). This reference also includes situations where the contracting authority found out that the supplier was an excludable supplier before the contract was awarded.
	Subsection (12) provides a definition of "material breach" for the purposes of this section.