We live in California, La Canada Flintridge and we signed a contract for bathroom remodel on early March 2020 and paid the down payment of $1000, the grand total for this remodel is about $29000. Then Covid happened so we postpone the starting date to indefinite. Since the numbers of the cases are still rising, we are having a second thought of terminating the whole contract i.e. no longer remodel the bathroom. I reviewed our contract and they do not mention anything about terminating the contract. So I reached out to our general contractor about the possibility of canceling the whole remodel and he said "Termination of a contract at this juncture typically entitles the contractor to recover lost profits under the law of 25%-30%, however you will not find it on the contract. This is what we can charge based on the state law." Is this lawfully right even though it does not state in the contract?
The terms of a contract will dictate if how and why a contract can be terminated. The first step should be to look over the contract and the termination provisions and the force Majeure provisions, if any present. Termination clauses may also allow for terminating the contract, regardless of a force majuere clause. If the contract can be terminated for convenience, then any other issues should be irrelevant since the contract could really be terminated for any reason (or no reason) as long as it's done in good faith. If there isn't a termination for convenience provision, but there is a termination for cause provision, then it'd be wise to analyze that provision to see if the contract can be terminated. It would be wise to consult with a California construction attorney to determine if there is a termination provision present in your construction contract and if not how to move forward in terminating the contract.