Question

Contract allowed Contractor 290 days to complete construction of fire station. Some of the drawings furnished by Owner proved defective. This delayed Contractor's performance of the work. Owner became dissatisfied with the pace of Contractor's progress and terminated the contract for default. Contractor contested the termination.

Discussion

Do you agree with the Owner's decision to terminate the contract? Based on your knowledge of construction contract risk management, how do you think the court would rule on this case? In whose favor?

Answer 1

If the drawings furnished by the said Owner was proved defective then the termination of the contractor by the Owner is not justified. The Owner should ask the contractor in written about the delay in progress of work and if the answer of the contractor was proved to be not justified corresponding to the wrong drawing then in that case the decision for termination might be correct. But in the above problem, there is no mention about any correspondings made to the contractor for delay in progress. So I think as per rules and regulations the Owner can not terminate the contrator straight way without any intimation and therefore the court's rule may go in favour of the contractor.