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3 valid grounds to terminate a construction contract 

On Behalf of | Jan 12, 2022 | Construction Disputes

A contract is extremely important in the construction industry. A contract outlines the rights and privileges of all parties.

While both parties may have every intention to follow through with the terms of the contract, things happen to thwart the best of plans. If the contract does not come with a clause that permits early termination, the dissatisfied party may have no choice but to explore their legal alternatives. 

Here are three other valid reasons why you can seek to terminate a construction contract:

Mutual agreement

A contract can be duly terminated when both parties consent to its termination. A mutual agreement to terminate a contract can happen when the circumstances surrounding the construction project have so changed that neither the client nor the contractor is likely to benefit from its completion. A mutual agreement to terminate a contract may be made orally. However, for legal purposes, it is recommended that the agreement be made in writing. 

Breach of contract

A contract can be terminated if there is a serious violation of the terms of the contract by one party. However, for the contract to be terminated on such grounds, the innocent party must prove that the breach is intentional and so severe that they are likely to suffer some type of loss as a result. 

Inability to complete

Unexpected events can make it impossible for a contract to be fulfilled. For example, an architect named in the contract could die, imported materials specifically requested could suddenly become unavailable. When that happens, it may be possible to exit the contract. 

There are many reasons why a construction contract may come to an end. The law allows either party to terminate a construction contract if they have valid reasons for doing so. If you’re stuck in a contract that isn’t working out, find out what choices you really have.