Terminating a Construction Contract: Legal Issues and Considerations

Understand the risk of terminating a construction contract and why it is a last resort.

Sometimes your only option is to terminate the construction contract on a project. Perhaps every chance at dispute resolution has failed. Maybe the material breaches by one party will never be resolved by remedies or damages recoverable under the contract, or maybe subcontractor liens on the project have caused irreconcilable differences between the owner and general contractor. Whatever the reason prompting termination of a construction contract, there are important legal issues and considerations to keep in mind. Termination, after all, affects everyone on the project. This course will address contract termination from the perspective of owners, developers, contractors, and design professionals. First, we will discuss the risk of terminating a construction contract and why it is legally a last resort. Second, we will look at contract clauses and terms that specify termination rights and remedies. Finally, we will conclude the program by identifying the best way to terminate a construction contract. The material will offer some case examples to consider with familiar circumstances to all working in the construction industry.