Copart hired Sparta Consulting to build software but terminated the contract for convenience when problems arose. The court ruled that terminating for convenience doesn't automatically block the developer from suing for unpaid work, but accepting completed milestones waives claims about defects unless the client can prove fraud. This means subcontractors can still recover for work done, even after termination, unless they already accepted payment for flawed deliverables.
Termination for convenience doesn't eliminate your right to sue for breach of contract or unpaid work—you can still recover for completed milestones
Once you accept payment for a milestone, you lose the right to claim defects later unless you can prove the client deliberately misled you about quality
Document everything: what was completed, what was paid, and any disputes about quality before accepting final payment to protect your claims