Contractors count on stable contracts to finish projects and stay financially healthy. But when a construction contract ends unfairly, it causes big problems like losing money and damaging a contractor’s reputation. Knowing the legal options helps contractors deal with these tough situations.
Know the reasons for unfair termination
If a project owner or general contractor ends a construction contract without a good reason, it might be unfair. Contractors should evaluate the reasons given for the termination. If the project owner cannot prove valid reasons like poor performance or missed deadlines, the contractor can challenge the termination.
File a breach of contract claim
Unfair termination often results in a breach of contract. Contractors can file a breach of contract claim to seek damages. Damages may include costs already spent, lost profits, and extra expenses caused by the termination. Contractors should collect important documents, like emails, project schedules, and proof of the work they completed, to support their case.
Try arbitration or mediation
Many construction contracts require mediation or arbitration before going to court. Mediation helps both parties reach an agreement, while arbitration involves a neutral person who makes a decision. These methods usually take less time and cost less than going to court.
Ask for injunctive relief
In some situations, contractors can seek injunctive relief to stop the termination until the issue resolves. This can help keep the project going and prevent financial harm. Contractors need to act quickly if they believe an injunction is necessary, as timing plays a crucial role in these cases.
Unfair termination causes serious problems, but contractors who act quickly and make informed decisions can protect themselves and move forward with confidence.
