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Suspension: Definition, Example and Related Terms

What is a Suspension ?

Imagine you're playing a game and something unexpected happens, so you pause the game. That's what suspension is like in a contract. It's when the activities under a contract are temporarily stopped, usually because something has gone wrong or unexpected circumstances have arisen.

A suspension can be decided by either or both parties involved in the contract, or sometimes by a third party, like a court. The reason for the suspension can vary, it could be due to a breach of contract, a dispute between parties, unexpected events or even government intervention.

The contract is not cancelled or ended, but simply put on hold until the issue causing the suspension is resolved. Once resolved, the contract activities can then resume or the contract can be terminated, depending on the situation.

It's important to note that during a suspension, the obligations of the parties may change, but the contract still exists. This is why it's important for contracts to have clear terms about what happens in the event of a suspension, including how and when the suspension can occur, what the rights and obligations of the parties are during the suspension, and how to lift the suspension.

When writing contracts, understanding suspension is essential, as it can impact the delivery of goods or services, financial payments, and relationships with clients or suppliers.


  • Scenario Description
    A software development company is working on a new application for a client. The client suddenly decides to halt the project for 3 months due to financial difficulties. In this case, the client has suspended the contract. The software development company will stop work on the project, but the contract is not ended. The terms of the contract will dictate what happens during this suspension period. For example, the client may still be required to make certain payments, or the software company may be able to work on other projects during this time. Once the suspension period is over, work on the project can resume.
    A food supplier has a contract with a restaurant to provide certain ingredients. However, a dispute arises over the quality of the ingredients, and the restaurant suspends the contract until the dispute is resolved. In this example, the restaurant has suspended the contract due to a dispute. The food supplier will stop providing the ingredients, but the contract is not terminated. The terms of the contract will determine what happens during the suspension period. For example, the restaurant may have the right to source ingredients from another supplier during this time, or the food supplier may be required to rectify the quality issue before the contract can resume.