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A New Construction Contract for the 21st Century: Termination

SERIES ARTICLE 

By Keith Pickavance

London, UK
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Introduction

In this, the final article in the eight-part series on the CIOB’s new Complex Projects Contract (CPC2013), we deal with termination. This is a term which applies to the end of the Contractor’s employment under the Contract (under which it has the right to access to the Site and to carry out the Works). It is not a termination of the Contract itself (which continues to subsist to govern the rights and liabilities of the parties).

Whichever contract contains the operable provision, termination must usually be carried out precisely if it is to be effective. Otherwise, wrongful termination may give rise to a claim for lost profit, lost opportunity and possibly even repudiation of contract.

Most standard forms of contract provide for termination of the Contractor’s employment under the Contract in three categorised situations. These are for

  • Convenience of the Employer
  • Frustration, and
  • default of either of the parties, including insolvency

Generally termination must be carried out fairly and in good faith. CPC2013 expressly requires both parties to act fairlyand JCT states expressly that no termination may be carried out “unreasonably or vexatiously” but there is nothing of a similar character in NEC (which only calls for the parties to act in a “spirit of mutual trust and cooperation”), or under AS4000, A201 or FIDIC, which only require that the terminating party should show cause where it is expressly required.

More…

To read entire article (click here)

Editor’s note: This is the 8th and final article in a series by Keith Pickavance about the CIOB’s new contract for complex construction projects. For information about the new contract, visit http://www.ciob.org.uk/CPC.  The full article includes footnotes for quotations and section references.

About the Author

keith-pickavanceflag-ukKeith Pickavance

Keith Pickavance first qualified as an architect in 1972 and then in 1978 obtained a law degree. After 20 years as an architect in private practice the last 10 years of which also involved construction management, dispute resolution and expert witness services, in 1993 he joined an American company specialising in forensic services and delay analysis. In 1996 he set up on his own again specialising in delay analysis and time management in London and Hong Kong. That practice was acquired by Hill International in 2006, an international construction management and claims consultancy with which he is now appointed an Executive Consultant.  He is a Past President of the Chartered Institute of Building and has led the CIOB’s time management initiative since its inception in 2007.  Keith is the author of Delay and Disruption in Construction Contracts (4th ed., 2010, Sweet and Maxwell) and numerous other books and articles on delay related issues.   Contact [email protected]