Termination and Suspension Clauses in Construction Contracts

Summary

Sometimes, during the construction of a project, an owner is confronted with a contractor that defaults on its contract obligations. The owner's initial reaction may be simply to terminate the contractor, but this is an extreme remedy that can ultimately increase the time and expense of the project. Thus, it is important for a construction contract to provide an owner with a variety of options when dealing with a defaulting contractor. This practice note provides drafting and implementation strategies for termination and suspension clauses in construction contracts and focuses on the following issues: