Before beginning a construction project, all parties must come to a mutual agreement on the risks, rights, and responsibilities involved to successfully complete the job. To signify a mutual understanding, a contract is drafted outlining these agreed upon terms. Contracts identify the services to be provided, the payments to be made as compensation for those services, and the schedule in which payments and services should be delivered. Construction projects don’t always go as planned, so there will be instances where a contract must be amended or terminated due to unforeseen variables.
To help you understand your contractual rights, our team of knowledgeable and experienced construction lawyers in Clearwater have identified common ways contracts may become terminated or invalid.
Agency Requested Termination
To legally enter a contract on behalf of a business, an employee must be defined as an “agent” of the company allowing them the authority to make decisions on behalf of the business. If the business can prove that the employee who entered the contract did not have the authority to do so, the agency can request to terminate the contract. However, the individual may have an implied “agent” status because of their role in the company or relationship with the principal or principals.
For example, if a principal signs off on a project-related payment made by the employee, the contract may still be legally binding because of the unintentional authority given to the individual. To protect your business, it is highly recommended to speak with your Clearwater construction lawyer to clearly define which members of your staff can and can not enter agreements or make business decisions on behalf of your business.
Termination due to Mistakes, Duress, and Fraud
A contract may also be deemed invalid if there is a mutual mistake made by the parties who entered the agreement, such as a miscalculation, incorrect project dates, or an incorrect project location. If a mistake was made by only one party, however, the contract may still be enforced and the agreed upon terms are legally binding.
A contract may also become invalid if one of the contracted parties are forced into the agreement through pressure or coercion. If physical or mental duress can be proven, the victim forced into the agreement may choose to dissolve the contract. Additionally, if information provided within the contract is intentionally fraudulent the contract may be terminated and the individual perpetuating the fraud may be legally responsible for damages incurred as a result.
Additional Reasons for Contract Termination
One of the key project details outlined within a contract is the completion schedule. If the project is completed within the time frame, the contract expires on the original completion date. If the completion date must be pushed back or extended for any reason, an amendment identifying the new completion date should be drafted and signed by all contracted parties.
Parties may decide to mutually dissolve a contract due to a number of variables. In mutual termination, it is best to work with your construction lawyer in Clearwater to draft a document stating the contract has been voided.
Often, contracts are dissolved because of a breach by one or more of the parties involved in a binding agreement, meaning they do not fulfill their contractual obligations. In the case of a breach of contract, the responsible party may be subject to repaying damages and other associated fees incurred as a result.
Before entering a construction contract, consult with construction lawyer to explain the terms to which you are entering. If the contract must be terminated due to misrepresentation by an employee, breach of contract, or a mutual termination, an experienced construction attorney will guide you through the process ensuring your business and assets are properly protected.
To schedule a consultation with one of our construction lawyers, please call 813.579.3278 or submit our contact request form to request a consultation.
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.