Cian BrennanFounder, Quantum Contract Solutions · Founder

One of the few shocking things about construction contracts

Name: One of the few shocking things about construction contracts
Uploaded: 2022-09-26T02:09:31+00:00
Duration: 41 s
Channel: Cian Brennan
Description: In this segment, the speaker explains that construction contracts typically grant the client multiple grounds to terminate a contractor, including…

26 Sept 2022 · 1 min

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In this segment, the speaker explains that construction contracts typically grant the client multiple grounds to terminate a contractor, including termination for convenience (the client simply wants to replace the contractor, perhaps for cost or program changes) and termination for default (the contractor fails to perform as required). The speaker highlights a common contractual imbalance: while clients have clear rights to terminate, contractors often lack any reciprocal right to terminate the client, leaving them vulnerable. The advice given is to ensure contracts include a reciprocal termination clause that allows the contractor to terminate the client for default, thereby providing a more balanced risk allocation.

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Client can terminate you for a load of different reasons. They can terminate you for convenience. They can terminate you for default. So convenience is basically just, they just want to get rid of you. They want to get someone cheaper in, or, you know, they've changed their program and they just want to get rid of you. Okay, fair enough. The other one is default. You haven't done the work that you're supposed to do. Okay, so that's a big one. That's obviously fair too, right? If you've not done what you're supposed to do, what they're supposed to do, they need to get rid of you and get someone else to do the job. The problem is If you don't have a way, a lot of contracts they're written now is you don't actually have a way to terminate them. It's all about the ways that they can terminate you, but you can't terminate them. So you need to make sure you have what's called reciprocal termination, is that you can terminate them for default.