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The client cut down 50% of the work, can I terminate the contract?

New YorkConstruction ContractCoronavirus

Due to Convid 19/economical decline, the client cut down the contractual building height of a large hotel project to half, can the contractor claim for the profit loss or terminate the contract?

1 reply

Dec 1, 2020

Generally, that'd come down to the terms of the contract. If the contract specifically allows for the owner to unilaterally alter the contract like that (perhaps through a partial termination or deductive change order clause), then yes - the owner could potentially reduce the scope of work quite substantially. What's more, if there's a force majeure clause, reduction in the scope might be legal as well.

If there's no contractual mechanism for doing so, then an owner could certainly be in breach of the contract if they try to reduce the scope, especially when the reduction is so substantial. And, if the contract has been breached, a breach of contract claim or termination of the contract may be in order. For more discussion on breach of contract claims: Construction Contracts | A Deep Dive on Breach of Contract. What's more, one of these New York construction lawyers may be able to assist if you get into a contract dispute: Top New York Construction Lawyers.

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