Termination For Cause
It’s important that all contractors are aware of the fact that there may come a time when they need to terminate a contract. There are a number of reasons for this, the contractor could be facing time and quality disputes or an unsuccessful relationship with the other party. Whatever the reason, it’s recommended that a contractor in this situation contact their Tampa construction lawyer for assistance. Terminating a contract, for whatever reason, is a serious matter and the decision should not be made lightly. However, if it’s determined that a contract termination is the only solution, it’s vital that the contract follows the termination conditions that are laid out in the previously agreed upon contract.
There are two different types of contract terminations, “for cause” and “for convenience.” In this article we will be discussing contract terminations for cause.
What is Contract Termination For Cause?
As Tampa construction attorneys, we are aware that contract termination for cause is only an acceptable form of termination if one of the parties is unable to fulfill their duties completely. If a contractor decides to terminate the contract for cause because the owner failed to pay them within the agreed upon time, that would be accepted reasoning. On the other hand, the owner also has the right to terminate the contract for cause if the contractor is unable to finish the agreed upon duties in the amount of time that was set.
Consequences of Termination For Cause
Terminating a contract for cause can negatively impact a contract’s future work. If a contractor is the one to terminate the contract for cause, the owner has the right to stop payments to the contractor and commandeer their materials and equipment for use during contract completion. Additionally, if the contractor terminates a contract for cause, they are potentially liable for the costs of contract completion that go above what was initially agreed.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.