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Termination for cause applies only to commercial contracts. The Government may terminate all or portion of a commercial item contract for cause if the contractor fails to: Comply with contract terms and conditions; or.Termination for cause shall comply with FAR 12. 403, and may include charging the contractor with excess costs resulting from repurchase. A Termination for Default on a government contract refers to a partial or complete termination of the contract. This occurs when one party cannot totally complete its contractual obligations. What is a Termination for Cause? A termination for cause is when a construction business is terminated for failing to execute their contract. If there is not sufficient time for a cure, the contracting officer will usually send a show-cause notice. Of these, none cost more to terminate than to complete.