Termination in Construction Contracts

Last updated on January 12, 2023 / By 

In construction contracts, termination refers to the ending of the contract by one of the parties. There are several ways that a construction contract can be terminated, including:

  1. Termination for cause: This means that the contract is terminated due to the fault of one of the parties. For example, if one party fails to perform their obligations under the contract, the other party may have the right to terminate the contract for cause.

  2. Termination for convenience: This means that one party can terminate the contract without cause, but may be required to pay damages or other compensation to the other party as a result. This type of termination is often included in construction contracts to allow the owner to change their mind about the project or to make changes to the scope of work.

  3. Termination due to force majeure: This means that the contract is terminated due to circumstances beyond the control of the parties, such as a natural disaster or pandemic.

It is important for both parties to understand the terms of the contract and the conditions under which it can be terminated. If a dispute arises regarding the termination of a construction contract, it may be necessary to seek legal advice or resolve the issue through arbitration or litigation.