an good example from an us gov standard contract is here https://www.acquisition.gov/far/52.249-2

It's basically "a no harm, no faul" termination of an existing contract, and is fairly common in competitive markets where there is no long term strategic partnership to develop an unique product.

If it's the buyer terminating it's either because the product is either no longer needed or an cheaper supplier was found, and if it's the seller it's caused by all sorts of resource optimization reasons(aka someone being willing to pay more for the same limited resources, or an increase in cost making unprofitable).