Contracts go bad for any number of reasons, including poor planning, unrealistic schedules and changing economic conditions. Here are some general suggestions for a Linux contractor to cope with and limit the damage caused by a project cancellation:

1. Communication. Don't lay blame. Instead, make a list of everyone involved and formally announce the cancellation, the reasons and what options and fixes are available. Take leadership and be honest, direct and clear to save your credibility.

2. Auditing. Hire an unrelated person to review what happened and how to avoid this kind of problem in the future. Do this quickly as possible to avoid reopening the issues later. Sometimes people's memory of events changes with time. Share the results with everyone involved.

3. Planing. If there is no fallback plan, work with the client to create an alternative that meets their needs. Treat this as an unrelated, new project--although the client may not want to work with you, attempt to salvage your investment.

4. Risk Management. After the audit, determine how to improve your business for future contracts. Can you create better benchmarks, research better consulting ideas or use better project management software?

5. Self-Assessment. The resource that you have the most control over is yourself. Where did you do well and where did you drop the ball--and how can you prepare yourself for the next project?

6. Endurance. If you have staff, you have to remind them of the bright side, help them weather the crisis and keep them doing useful work in the short-term. The business must keep running.

7. Patience. Along with keeping things running, your staff involved in the project may be angry, frustrated, doubting themselves, etc. Let them express their emotions, offer a shoulder for them to lean on, and assist them in moving to a new project or dealing with the problems of being laid off.

8. Learning. Be courageous and honest. Don't stonewall, exaggerate or lie about your responsibility. It's for your benefit to deal with the reality of the situation.

9. Reassessment. Are your other contracts or plans affected? Adapt your time, money and resources to the new situation.

10. Responsibility. Do this after everything above. Use the minimum punishment to minimize disruptions, costs and morale loss. In extreme cases where individuals broke the law or their contract, make sure everyone involved knows why the person is being justly fired. Legal action seldom results is positive results. Fear is not a good motivator.