The following Construction practice note Produced in partnership with DAC Beachcroft provides comprehensive and up to date legal information covering:
The JCT contracts contain detailed provisions for termination, setting out the grounds on which the parties may terminate and the consequences thereof. Under the JCT contracts, it is the Contractor’s employment that is terminated, rather than the contract itself. This distinction is designed to ensure that the post-termination provisions contained in the contract survive termination.
This Practice Note refers to the clauses set out in the JCT Standard Building Contract (SBC) With Quantities 2011 and 2016 editions, but comparable provisions are found within the other JCT contracts. It should be read alongside Practice Note: Termination of a construction contract.
Termination should always be considered very carefully. If the termination is wrongful, or the correct procedures are not followed to the letter, the purported termination may amount to a repudiatory breach of contract by the party seeking to terminate. In any event, if the other party disputes the purported termination, the terminating party could find itself involved in a costly dispute.
In this regard, it is important to be aware that, under the JCT contracts:
a notice of termination must not be given unreasonably or vexatiously (clause 8.2.1)
In John Jarvis v Rockdale, the court thought that, in relation to the 1980 JCT form, ‘unreasonably’ was ‘a general term which can include anything which can be objectively judged to be unreasonable’, and that 'vexatiously' connoted ‘an ulterior motive to
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