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Can a homeowner terminate a construction contract that does not have a specific termination clause?

GeorgiaNotice of Termination

I am a homeowner with an extensive interior renovation project. I would like to know about grounds to terminate a contract with a remodeling contractor, when the contract did not include a termination clause (huge mistake on our part that we should have thought to ask for). Our contract specifies that any additional work should be reflected in a Change Order signed by both the contractor and the owners. The contractor did work outside the scope of our contract and without telling us, and is now insisting that we pay him for it. When we objected, he accused us of bullying him and threatened that if we don't pay him, he will invoke the binding arbitration clause in the contract, stopping work on the house for months. This kind of delay would cost us thousands of dollars in ongoing expenses on our old home that we can't sell until we move into the new house. We are frustrated that he is essentially blackmailing us -- he knows that the extra money he is demanding is less then it will cost if we delay for months or even a year in arbitration. We don't want to give in to this but don't know if we have another choice.

1 reply

Mar 16, 2022
Good morning. As a general matter, in the absence of a specific termination clause, a party to a contract may terminate it if the other party has materially breached the contract. This is a difficult standard to meet, since we are talking about the "death penalty" of contracts. Failing to get a signed change order may invalidate the request for extra compensation, but would probably not arise to the level of a breach that would justify termination. Of course, your rights and remedies will depend upon all of the specific facts relating to your dispute. I hope this provides some general guidance. If you need further information please contact me or other competent counsel.
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