Cian BrennanFounder, Quantum Contract Solutions · Founder

What is Termination for Default in Construction Contracts

Name: What is Termination for Default in Construction Contracts
Uploaded: 2025-02-16T22:00:16+00:00
Duration: 18 s
Channel: Cian Brennan
Description: In this brief instructional segment, the speaker explains the concept of termination for default in construction contracts. When an owner requests a…

16 Feb 2025 · 0 min

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In this brief instructional segment, the speaker explains the concept of termination for default in construction contracts. When an owner requests a performance that the contractor fails to deliver, the owner may lawfully terminate the contractor’s agreement. The owner can then engage a substitute party to complete the work and, per contract provisions, back‑charge the original contractor for any additional costs incurred. The speaker cautions contractors to be aware of this risk, as termination for default can lead to financial liability beyond the loss of the contract itself.

Termination for default is pretty fair. They've asked you to do something and you haven't done it. They want to terminate you because you haven't done it and they need to get someone else in to do it. And so they can terminate you and somewhere else in the contract, it might say something along the lines of, well, we're going to have to pay someone else to do it and we're going to backcharge you. So be careful of that. That's something that can happen as well.