Termination - construction contracts

Common law termination

The termination rights in the contract are in addition to the common law rights of either party. If party commits a repudiatory breach of contract, this breach can be accepted by the other party bringing contract to end.

What are the consequences by the common law of repudiatory breach?

innocent party can claim damages for the lossit has suffered due to the breach, including loss of profit to put party into equivalent position as the contract would be performed.

What is repudiatory breach?

Repudiatory breach is one that is so serious that looking at all circumstances the contract breaker has clearly show an intention to abandon and altogether refuse to perform the contract.

Termination by default by the contractor (employer termination)

Clause 8.4.1 substantially suspending work without reasonable cause, failing to proceed diligently, refusing to comply with an instruction to remove defective work, breaching the prohibition on subcontracting, failing to comply with CDM

Termination by default by the contractor (employer terminates)

If the c continues with the default 14 days from receipt of the first written notice, the employer may on or within 10 days from the expiry of that 14 day period terminate the contractor's obligations under the contract by way of a second written notice.

Insolvency related events

Events which indicate that the defaulting party is experiencing. financial difficulties include an inability to pay debts as they. fall due, enforcement of any security, and steps taken for a. party's winding up, dissolution or administration

Employers termination due to insolvency (Clause 8.5)

If the employer intends to terminate the contractor's obligations because of the contractor's insolvency, the employer must issue a written notice identifying 1 of the insolvency events in clause 8.1.