Construction Agreement Termination Clause

However, if the contract had included a termination clause in the Hensler case, the developer of the public construction project would have had to terminate the contract and then award the work to a new contractor as long as the termination had a reasonable purpose. In addition to an explicit statement allowing the principal or the main contractor to terminate the contract, a termination clause will generally be explained: from the point of view of a contractor, the exercise of a termination clause by the owner can influence the benefit of the contractor`s contract. Simply put, if the contract is terminated for convenience, the contractor will not realize the expected profit during the performance of the contract. Where the contract is terminated, the amount paid to the contractor cannot recover the contractor`s home office overheads that have been awarded to the contract. Unfortunately, it`s not always that simple…