Terminating Construction Contracts

If a party wishes to terminate a construction contract (often in fact more accurately described as terminating a party’s employment) and thereby end it before it would otherwise end by the discharge of the parties’ obligations under it, that party will need a justification for doing so. Grounds for which termination is permitted are often set out in the contract. Likewise, a procedure for terminating. Naturally these to be carefully followed by a party relying on them.

Termination is usually permitted for example where a party is insolvent, abandons carrying out the works, does not pay for the works or commits some other serious breach of contract. It is common to need to serve a notice of intention to terminate first, followed by a notice of termination.

There is also a right at common law to terminate a contract that can be considered instead of or in addition to any contractual right. That common law right can give rise to circumstances where a party may claim that such is the seriousness of the contractual breach by the guilty party, it is a repudiatory breach, meaning that the innocent party can accept it and treat the contract as terminated immediately.

Attempting to terminate a contract carries the inherent risk that the grounds for doing so are later held (e.g. by a Court) not to have in fact existed or that the procedure was carried out defectively. That thereby exposes the party terminating the contract to allegations that it itself was in breach of contract by seeking to terminate.

The usual remedy sought by an innocent party is in damages.

Termination of a contract must be distinguished from other situations where contractual performance is stopped, e.g. suspension and delay, because in those situations, performance is only temporary, whereas termination is final.

Termination is a powerful tool but one that must be exercised with caution.

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Get in touch using the contact form below, calling us on 0204 579 8686 or emailing us at contactus@ridgemont.co

Why Ridgemont?

Ridgemont’s team is made up of expert senior solicitors, all of whom previously worked in “Big Law” (i.e. the top 50 law firms in the UK).

We provide bespoke advice tailored to your needs.  Our advice is commercial and pragmatic, enabling you to use it effectively to make business decisions.

We have an expert understanding of construction law. We can guide you through the maze of terminating construction contracts.

We are user-friendly.  Our lawyers speak in plain English, providing service levels akin to “Big Law”. We have built our processes to make onboarding as pain-free as possible. Our fee earner structure means that you have access to a partner-level solicitor at all times and they will always be on top of your matter.

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We provide “Big Law” service levels and quality of advice, with expert senior solicitors providing commercial, pragmatic advice. Necessarily, that does not come cheap as we have to invest in great lawyers and everything they need to do their job. However, due to us having comparatively lower overheads to “Big Law” firms, we are able to charge less than they would for providing the same service levels and advice.

We are proactive in finding innovative ways to advise our clients in a cost proportionate way.

Who we act for?

We act for developers, contractors, sub-contractors, professionals and investors across a range of sectors from residential to retail.

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  3. Assuming you wish to engage us, we will then onboard you as a client, which normally takes a matter of hours.
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