Default and Termination Clause
(Construction Contract)

Summary

This default and termination clause may be included in construction contracts and is drafted from the perspective of the owner. It provides all the remedies available to an owner when a contractor in a construction project is in default, in addition to termination of the contract. This clause includes practical guidance and drafting notes. During a construction project, owners are often confronted with a contractor that is in default in its contract obligations. The treatment of a defaulting contractor is often handled in a contract provision entitled "Termination for Default". However, a Termination for Default clause frequently does not give an owner the broad powers it may want in order to deal with a defaulting contractor in addition to the right to terminate the contractor for default. For this reason a broader contract clause may be desired. The capitalized terms used in this clause should be conformed to the defined terms in the relevant construction contract. For a list of key resources covering construction-related tasks for a first-year associate, see First Year Associate Resource Kit: Construction. For a discussion of issues and tasks commonly encountered by in-house lawyers and counsel working on construction-related matters, see In-House Construction Resource Kit. For guidance on owner and contractor agreements, see Owner and Contractor Agreement Resource Kit. For a full listing of key content covering construction, see Construction Resource Kit. For a list of key resources covering construction-related tasks for a junior associate, see Junior Associate Resource Kit: Construction. For additional guidance on owner-contractor agreements, see Owner-Contractor Agreements.