Reasons for terminating a construction contract are varied. It could be that a simple notice period could be served or that one or other of the parties have breached the terms of the contract. Only in cases where the breach is repudiatory is the innocent party relieved of all of the contractual obligations, in other cases the parties are still required to fulfil the contract up until the point it was terminated.
Many contracts include a termination clause that makes a detailed provision regarding when and how a termination may take place. Strict adherence to the detail of the clause is important in order to avoid terminating unlawfully and thereby being in breach of contract.
This is a fraught area and the consequences are usually grave even when acting correctly; the consequences for getting it wrong can be catastrophic. Legal advice should always be taken.
This section is maintained by Peter Solomon of Orbis Limited.