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Understanding Your Rights for Construction Contract Termination

Once you have signed a contract, you may feel that both parties are stuck honoring the contract terms until the project is over, but this may or may not be the case. There are situations where your client or your company can terminate the contract legally. In this short editorial, an Asheville construction lawyer highlights some of your rights for construction contract termination. 

Related: Wrongful Contract Termination in the Construction Industry

Termination for Cause

Termination for cause is one of the ways that the client can terminate the contract. It happens when the construction company has not met the terms of the contract, either through missing deadlines, subpar work, or other conflicts. The other party then has the right to terminate the contract. 

Related: The Factors Involved in Termination for Cause

Specific Contract Terms

It’s always a smart idea to include contract termination terms directly into the contract when entering into a construction project. Things can happen over the course of a project where it might be advantageous to end it prematurely. If you have an existing contract that you want to break, start by looking at the contract for any specific contract terms included about termination. You might already have grounds to terminate the contract.

Advanced Notice

Most termination clauses have requirements in place for giving advanced notice before terminating an agreement. Be sure that you provide any advanced notice that would be required under the contract. Even if the contract does not specify the need for giving the client advanced notice, it’s a courtesy worth giving them in the name of professionalism. 

Termination for Convenience 

Your contract could have a termination for convenience clause, where either party could opt to terminate the contract for no reason at all. Depending on whether you’re the party to utilize the clause will make a difference when it comes to how you feel about including it in future contracts. However, including this clause can ensure that both parties feel that it’s an ongoing good fit during the course of the project or have the ability to end it.

Related: Termination for Cause vs. Termination for Convenience

Mutual Agreement 

If both parties are unhappy with the agreement and want to terminate, it’s possible to mutually agree to do so. Contracts protect parties from failing to meet their commitments. If both parties want to change the contract, it could be possible. No party wants a construction contract to end on negative terms. However, there are occasions when it’s necessary to try to terminate a contract. If you have questions about the contract termination process, contact an Asheville contractor attorney from Cotney Construction Law.

If you would like to speak with an Asheville construction lawyer, please contact us today.

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.