There are many different facets of construction contracts that require careful review, regardless of the scope of a project or the amount of time it will take to finish a job. However, contractors and construction company owners need to carefully go over the process of terminating a construction contract when one party wishes to end the agreement. If you are in this position, make sure you review your rights to back out (or the other party’s rights to cancel the agreement) and other legal matters related to contract termination.

When contract termination comes up, those involved often feel a lot of stress and have difficulty focusing. However, it is critical to understand your rights as well as your obligations in order to protect yourself financially and minimize stress.

Rights to terminate a construction contract

Some construction contracts contain terms that allow either party to terminate the agreement at will or in certain circumstances. If you are drafting or preparing to sign a construction contract, it is important to think about including a termination clause in the agreement. On the other hand, some construction contracts are terminated even though there is no termination clause in the original agreement. Sometimes, this occurs due to a significant change in circumstances or because a contract is breached.

The breach of a construction contract

Whether workers are prevented from accessing a job site, a project is abandoned or a contractor refuses to perform work, there are many ways in which construction contracts are breached. Sometimes, a breach is so serious that it necessitates the termination of an agreement. If you are dealing with the termination of a construction contract, review your legal options closely.