Apr 12 2021

Termination Agreement Construction

Before going too far, we should address a simple question: why are termination clauses necessary? Shouldn`t the other party who has not violated the treaty be able to automatically terminate the contract if the contract is breached by a party? Ideal construction contracts define the premise in which the party can terminate the contract, some of the common reasons why the parties can terminate the contract are: the contractual relationship may expire; trust can disappear and in a difficult financial atmosphere, organizations or individuals can be declared bankrupt. Therefore, the clause allowing both parties to terminate a construction contract should be considered before the contract is signed. In the legal world, this clause is called termination of the contract. The termination of a work contract can be a real danger and has great impact if it is done inappropriately. This is because if the termination is made without reasonable grounds, it is itself considered the removal of an agreement. It is therefore essential that both parties understand and appreciate the right to terminate the contract and subsequent proceedings. Therefore, it is always recommended by UAE construction lawyers to be wary of the legal consequences of such a drastic measure and should never be taken lightly. Under the common law, the courts of the United Kingdom and Australia have approached this issue differently. This difference in approach has made termination a more attractive option for contractors when adopting the refusal, especially for companies with “bad business”. An example of an attempt to do so is in a 2003 case between Abbey Development and PP Brickwork Ltd. In this case, the contract allowed the employer to reduce or increase the amount of work offered to the contractor, as well as a termination clause. Abbey invoked these provisions to remove PPB`s work after terminating the contractor due to inadequate control and ill-treatment. The judge found that the provision was not clear enough to allow Abbey to pass the work on to another contractor – it allowed Abbey to reduce the work only if it was no longer necessary for the completion of the project.

Clear wording: as with most provisions of the treaty, clear wording will be required before a termination clause takes effect in its entirety for convenience. Unreasonable provisions, such as the possibility for the employer. B to transfer work to third parties, must be clearly and unambiguous, otherwise they will not be applicable.