Termination or abandonment of a construction construct.

Especially in the construction context, decisions surrounding cessation of work and/or payment should not be taken lightly. Litigation is expensive.

A recent decision from the Superior Court of Justice reiterated important principles to consider regarding the termination or abandonment of a contract:

  • If an owner, without justification, ceases to make payments required under a construction contract, cancels it, or through some act without cause makes it impossible for the contractor to complete its work, then the owner has breached the contract and it has no claim for damages.
  • Mere bad or defective work or insignificant non-completion will not, in general, entitle an owner to terminate a contract.
  • Cessation of work and abandonment are not necessarily co-existent, and in order to constitute abandonment, a cessation of work would have to be permanent. Abandonment is a question of fact.
  • If you are a party to a construction contract planning on terminating a contract, ceasing to make payments, ceasing work, etc., I highly recommend contacting a construction lawyer before taking a step that could amount to a breach of contract.

Click here for a link to the decision.

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