Termination and suspension

A construction contract may be discharged, terminated or determined in a number ways. These principally include:

•
by performance
•
by agreement/release
•
as a result of a misrepresentation/fraud (see Practice Note: Misrepresentation—rescission as a remedy)
•
frustration (see Practice Note: Discharge by frustration)
•
at common law for 'repudiatory' breach of contract ('repudiation') (see Practice Note: Repudiation of contract), or
•
pursuant to a contractual power to terminate the contract, for example:
1. ◦
  for breach of contract
2. ◦
  at will
3. ◦
  on insolvency (see below)

Practice Note: Termination of a construction contract considers termination of a construction contract at common law for repudiatory breach, and termination by operation of a contractual provision either for breach or at will. See also Practice Note: Material breach in construction contracts, which looks specifically at contractual provisions allowing a party to terminate (or suspend works) for ‘material breach’.

A useful summary of the issues to consider is also available in Checklist: Termination of a construction contract—checklist.

In relation to consultant appointments, see Practice Note: Termination of a consultant's appointment.

Standard

To view the latest version of this document and thousands of others like it, sign-in with LexisNexis or register for a free trial.

TAKE A FREE TRIAL

Latest Construction News

RIBA announces formation of Belfast Group to standardise fire safety guidance

The Royal Institute of British Architects (RIBA), along with architectural institutes from Northern Ireland, Scotland, Wales, and the Republic of Ireland, has announced the formation of the Belfast Group—a coordinated body designed to standardise fire and life safety design guidance across the five nations. Formed in response to the Grenfell Tower Inquiry Phase 2 report, this initiative aims to ensure that architects in all jurisdictions have equal access to the relevant national regulations, standards, and technical information required to design buildings that meet the highest fire safety and life protection standards. Additionally, the Belfast Group will develop uniform guidance for construction professionals on fire safety requirements and procurement practices.

NHBC Buildmark Choice policies—cause of action accrues when the insured party ‘has to pay more’ to complete the building work as a result of contractor insolvency (NHBC v Peabody Trust)

Construction analysis: The Court of Appeal (CoA) confirmed that the cause of action under Option 1 of the National House Building Council (NHBC) Buildmark Choice policies does not accrue on contractor insolvency—the cause of action accrues when the insured party ‘has to pay more’ to complete the building work as a result of that insolvency. The moment in time at which the insured party should be considered to be in the position of ‘having to pay more’ has been left to be determined in future proceedings.

Construction weekly highlights—24 July 2025

This week's edition of Construction weekly highlights includes the Court of Appeal (CoAs)’s decision in relation to NHBC Buildmark Choice policies confirming that the cause of action accrues when the insured party ‘has to pay more’ to complete the building work as a result of contractor insolvency (National House Building Council v Peabody Trust), Construction Leadership Council (CLC) guidance on Building Control Approval Applications for new higher-risk buildings, Ministry of Housing, Communities and Local Government (MHCLG) guidance on the Building Safety Levy, MHCLG’s announcement of legal deadlines for landlords to remediate unsafe cladding in social housing, a Royal Institution of Chartered Surveyors (RICS) consultation on it updated cladding valuation standard, a British Standards Institution (BSI) consultation on a new code of practice for bringing safe construction products to the market, a Technology and Construction Court (TCC) decision enforcing an adjudicator’s decision to award the responding party in the adjudication the notified sum (VMA Services v Project One), a CoA decision providing guidance on "costs directly incurred" in a waste management project agreement (Buckinghamshire Council v FCC Buckinghamshire Ltd), an update on the status of the Planning and Infrastructure Bill together with updated guidance from MHCLG on the same, the National Infrastructure and Service Transformation Authority (NISTA)’s interactive Infrastructure Pipeline tool, and publication of the Welsh Government’s circular on updated building control profession standards and codes.

Senedd Research publishes analysis on Welsh building safety remediation progress

The Senedd Research has published an analysis of building safety remediation progress in Wales, eight years after the Grenfell tragedy. Although Aluminium Composite Material cladding has been removed from all affected Welsh buildings, broader safety concerns persist. The Building Safety (Wales) Bill, currently at Stage 1 of the Senedd’s legislative process, focuses on establishing future safety regimes rather than accelerating current remediation efforts. The Welsh Government’s Building Safety Programme has identified 461 buildings with safety issues, with 60% located in the private sector and 40% in social housing. To date, only 43% of these buildings have either completed or initiated remediation work. Progress is particularly slow for the 161 buildings under the responsibility of major developers, with only 30% having begun or completed the necessary work and only four fully remediated.