Any contract may be terminated early for a number of reasons instead of continuing for its expected life. A typical classification of reasons for early termination is listed below.

Termination for convenience (or "unilateral termination”).

The government will always reserve the right to terminate the contract early, on the basis of public interest.

As in any complex contract, especially those of a long-term nature, it is not possible to foresee every event that may happen and affect a PPP contract. Therefore, changes will happen and this can often lead to disputes.

Also, it is logical that some provisions in the contract may require interpretation in some of their aspects, and it is also logical that differences and discrepancies will emerge on issues that require an assessment of costs or a valuation (see box 5.35 for some samples of typical dispute matters).

As noted, the contract must have flexibility built in to enable changing circumstances to be dealt with as far as possible within the contract. In this sense, the contract should consider and permit certain potential changes (which may be subject to limits in quantity or the law may provide those limits) and establish processes to implement those changes.

There are a number of types of changes that may occur in a PPP.

A sound framework should encourage proactive information disclosure of both the project contract and the project’s performance. This is done in order to promote transparency and gain an acceptance of the PPP model by the general public as well as allowing for performance auditing of the PPP program. However, disclosure of the contract will need to be limited to protect the legitimate interests of the private partner in keeping commercial information confidential, as well as the need for the public partner to protect its position for future negotiations.

Chapter 1 introduced a number of topics that are typical considerations for the public partner. These are related to the financial structure of the project contract and should be documented in the contract. See section 0.7.3, especially the following.

When a compensation event occurs, the private partner has the right to claim compensation to offset the loss suffered or that will be suffered, or part of the loss suffered in shared risk events. The loss may include forgone revenues (for example, revenue lost due to a delay in construction, where the delay is a result of a risk covered by the contract as a compensation event).

Section 9.2 has shown how payments are linked to service performance through availability payment mechanisms, so that deductions or abatements are made from the payments commensurate with any failure to meet set service standards or target levels of service. The price paid is therefore adjusted to match the effective level of service rendered by the private partner so that the private partner suffers the financial consequences of under-performance.

Performance requirements may be considered a part of the broader concept of "technical requirements" or "technical specifications", which in general terms refers to the specifications in the contract for what is requested of the private partner in terms of quality and/or quantity. Performance requirements may also be named “output specifications”, and they may be referred to under the broader concept of “operation and maintenance requirements”.

The structure of the contents of the contract document may vary significantly from country to country, and even depending on the authority or level of government within the same country. It is preferable that the structure of the contents, the nomenclature, and the treatment of many commercial matters are the same or similar (always respecting the specific characteristics of each project and sector) within one particular market, with the incorporation of contract guidelines or standards (see box 5.29 ) to the PPP framework.

Sections 4 and 5 of this chapter have extensively described financial and risk structuring matters. The defined structure (that is, all features related to risk allocation and risk treatment) and features related to the financial structure (means of compensation when there is more than just the payment mechanism or user charges, timing considerations, other direct financial and indirect support approaches) will have to be incorporated into the contract.