{"id":93669,"date":"2021-05-20T14:43:01","date_gmt":"2021-05-20T13:43:01","guid":{"rendered":"https:\/\/www.pbctoday.co.uk\/news\/?p=93669"},"modified":"2021-05-20T14:45:08","modified_gmt":"2021-05-20T13:45:08","slug":"terminating-construction-contract","status":"publish","type":"post","link":"https:\/\/www.pbctoday.co.uk\/news\/planning-construction-news\/terminating-construction-contract\/93669\/","title":{"rendered":"Terminating a construction contract \u2013 the end of your troubles or the start?"},"content":{"rendered":"

Sarah Evans<\/a>, construction partner at law firm Spencer West<\/a>, explores the factors to consider when terminating a construction contract<\/h2>\n

Whilst construction projects should always aim to create a harmonious supply chain marriage, often parties find themselves heading for divorce. And never more so than in this post-covid, post-Brexit era, where issues around lack of materials<\/a> and resources, quality of work, delays to completion, cashflow and payment frequently prove incapable of resolution by collaboration.<\/p>\n

Supply chain members are left frustrated, feeling they have no alternative but to terminate relationships early. But, just like a divorce, termination is serious, often with no clear-cut innocent party. It requires adherence to strict procedures and holds dire financial consequences for those getting it wrong.<\/p>\n

When can a construction contract be terminated?<\/h3>\n

There are limited ways to terminate including:<\/p>\n

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  1. \n

    By agreement<\/h4>\n<\/li>\n<\/ol>\n

    The parties can agree to terminate on commercial terms. Recording these terms in a formal settlement agreement<\/a> will minimise the scope for further dispute. This is the amicable divorce, where relationships can be preserved with an early conclusion and there are no arguments over procedural irregularities (see further below).<\/p>\n

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    1. \n

      Pursuant to the terms of the contract<\/h4>\n<\/li>\n<\/ol>\n