Termination: Fortune May Favour the Brave (and Well-Prepared)
Published by Construction Law
Published by Construction Law
Termination of major construction contracts has traditionally been seen as a last resort, leading many parties to soldier on in bad situations given the potential risks of terminating. However, recently we have seen parties increasingly willing to terminate (or at least seriously consider it), and other stakeholders, such as lenders, increasingly give approval for terminations.
Even so, termination is still something of a ‘nuclear option’. It’s risky and requires careful planning. There are serious consequences for the terminating party who gets it wrong. In this article published by Construction Law, Angus Rankin, Mat Parente and Jess Webster explore some key points to consider in the decision-making process.
Key Points
- Recently parties seem increasingly willing to terminate major construction contracts rather than soldier on as in the past.
- While termination may still be a last resort, risks for the terminating party can be mitigated by careful planning and treating the termination as a ‘project’ in its own right.
- A termination ‘steps plan’ and timetable will need to be prepared with military precision – a process that should start well before the termination notice is sent.
To read the full article, click here.
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This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.