Deciding to terminate a subcontractor is not a decision that should be taken lightly. There are a lot of risks and costs associated with termination, even if the termination is...
This is the homepage for articles about contractor termination. The term “contractor termination” has to do with the firing or dismissal of a subcontractor on a construction project.
The termination of a subcontractor could occur for a number of reasons. No matter what the reason is, the terminating party should consider all of the risks and implications that come with such a decision. Firstly, you need to consider the legal grounds for termination, like the termination clause in the contract. This helps the terminating party make sure they’re following the property procedures and that the reason for termination is valid. Secondly, it’s important to consider the work schedule. Will the deadline get extended? How much will the costs to finish rise? Thirdly, the replacement costs involved in a contractor termination are worth looking into. In some cases, the terminating party may need to pay the difference if the costs rise past the agreed upon amount. With all this in mind, you may also want to consider some alternatives to termination.
After the termination is deemed valid and everything is in place to carry on with the process, it’s time to draft a termination agreement. This agreement sorts out the final payments, remaining obligations, and the release of any claims. Lastly, and most importantly, you need to document the entire process to make sure you’re protected from any potential liability or dispute over the course of the process.
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Most Recent Posts on Contractor Termination
When dealing with contractor termination on federal projects, the government must follow proper procedures. Otherwise, problems will arise.
Terminating a subcontractor for inadequate performance is a difficult decision. The process can be long, expensive and risky from a legal perspective. There are several potential consequences to consider when...
Terminating a contract can be an expensive and time-consuming process, but matters can become even worse when there's a wrongful termination.
It might be tempting to fire a contractor or sub who's underperforming, but termination can be a tricky topic - particularly termination for cause.
When a contract features a termination for convenience clause, a customer can cancel the contract without a breach or default. Still, there are limitations.
Whether done by deductive change order or partial termination, reducing the scope of work on a project can create some headaches.
It only takes one nonperforming subcontractor to derail an entire job. Let's look at how to avoid those subs, and how to deal with them when problems arise.
The termination clause in construction contract could be the difference between an easy breakup and a lawsuit. Learn how termination works as well as the different types of termination clauses.