Construction Contract Termination Letter

In many cases, contracts agreed upon are not or cannot be followed due to certain reasons. While certain reminders may be helpful, they don’t always get the work done, which is when there is no option but to terminate a contract that is only using up time and not yielding results. Similar is the case when it comes to a construction contract. However, it is important to know that terminating a contract is not as easy as sending a letter stating the termination. There are certain pointers that need to be kept in mind when sending a letter to terminate a construction contract.
  • There are specific termination clauses that are stated in a contract, and it is the violation of these clauses that can allow you to terminate the contract.
  • Some construction contracts may state a clause that requires you to provide a warning notice before you send out a termination letter. If this notice is unheeded, you may then be permitted to terminate the contract.
  • If a clause states that an advance warning is imperative before the termination letter is sent, and you fail to do so, you may have to pay a penalty, which is why making sure you are permitted to send a contract termination letter is important.

Once you are sure that you are permitted to send across such a letter, here is a sample that will help you write out one.

Sample

When writing a termination letter, apart from the aforementioned points, there are also certain dos and don’ts that need to be followed. For one, the letter is a formal legal document, and should therefore be written professionally. It should be short, and should not beat around the bush in any manner. Mention the date on which the letter was written, as well as the date from which the termination will be in effect. If it is immediately, you may simply mention ‘with immediate effect’. Ensure that it is signed and returned to you for it to be valid.

                                                                                                                            Organization Name
                                                    Organization Address • Organization Contact Number •

                                                                                                         Organization E-Mail Address

Date

Name of Concerned Person

Designation

Company Name

Company Address

Sub: Termination of construction contract

Dear Ms./Mr. Name of Concerned Person,

It has been brought to our notice that since the last 30 days, the speed of the work on our construction site [include address of construction site] has been waning, until it came up to a standstill on June 15, 2011. We informed you about this situation as soon as it was brought to our attention, and have even sent you a notice suggesting termination if the work was not resumed in the promised manner to meet our tight deadline.

Since this warning has gone unnoticed and no progress can be seen on the construction site, we regret to inform you that we wish to terminate our mutual contract with immediate effect. This contract has been terminated based on clause 7B and 8A of the construction contract.

We request you to sign a copy of this letter in approval and send it back to us within 7 days of its receipt. Non-compliance may result in legal action.

Thank you.

Sincerely,

Signature

Name of Concerned Authority

Designation

Company Name

If you are still unsure about the process of writing such a letter, it is best that legal advice be sought for the purpose to avoid any kind of confusion.

Disclaimer: This article is only for informational purposes and does not intend to replace expert legal advice.

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