EAC is disputing our signed contract and terms and in result to this sent me a notice of termination. The contractor did not follow the steps of our contract to accurately terminate and hired another cleaning company, can he do this?"
2 replies
Mar 5, 2020
If a customer failed to follow the contractual requirements for terminating your contract, it's quite possible that they're in breach of the contract and they could be liable for damages associated with a wrongful termination. While that generally won't entitle a terminated party to be reinstated on the job, it could be good leverage for negotiating a settlement, forcing your way back onto the job, or a sound basis for legal action.
So, as for "Can they do that?" - legally, no. A termination that fails to follow a contractually required termination process is not proper and could result in a valid breach of contract claims. However, even if it is a breach of the contract, damages could be available - but specific performance is a remedy rarely granted by the courts. Meaning, a court probably won't force a customer to bring you back on the job. But, you may be able to negotiate a favorable situation - whether that's getting reinstated on the job or being paid a settlement - by leveraging potential legal claims.
For further discussion on termination clauses and processes: How a Termination Clause Works in a Construction Contract.
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Mar 7, 2020
As a follow-up, if you received a notice of termination, you should be consulting an attorney to make sure your rights are preserved including any rights associated with the contractor that terminated you seeking damages. This may include responding to the notice of termination versus allowing the notice to stand pat without any response.