WASHINGTON (Reuters) -By Andrea Shalal-Esa
A little-known aspect of U.S. contract law may provide a road map for how the Obama administration can implement billions of dollars of automatic budget cuts due to take effect in January without having to pay massive change fees to its contractors.
U.S. courts have found that the government has certain contractual rights
because of its sovereign standing, including the right to unilaterally change
the terms of its contracts, delay or stop work on contracts or terminate them
outright, a congressional report found.
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