Wrongful termination of a contract can be of legal
consequence for any party involved – regardless of who initiated it. Consider a
contract; that is like a minefield, any word or action taken ‘in the moment’
can bring potential consequences at any turn or junction, the resultant damages
could be linger for years. The issue of termination – whether it is lawful or wrongful – can be
decisive in many legal disputes.
The incorrect Notice to Terminate during a breach of a
building contract can bare substantial risk for both the ‘innocent’ part or the
‘offending’ party. The bases of which can result in due diligence of notice
when addressing the termination before and/or during court. By allowing a
degree of time for notice to be addressed and heard upon from the ‘innocent’
party to the ‘offending’ party is the first step to resolving or initialising
opportunity to resolve the breach. This action is to allow any further step to
be in the hands of the offending party until they have demonstrated by
complying or actions of deliberate intent to cancel and not be bound by the
terms of the contract between the parties involved. It is at this point the
‘innocent’ party is able to safety proceed to end the contract. It is however,
crucial for the Notice period to be critical towards both parties if there has
been a breach of conduct. Both parties must be able to use the Notice period
for their benefits.
If the Notice has been sent to the ‘offending’ party,
resulting in the contract being terminated, either party may bring action in
court or arbitration for any issue or dispute raised in conjunction with the
agreed contract. This is to be assessed by the court of arbitrator. They will
then assess, and review actions taken (or not) of the party (alleged to be in default)
examining any appropriate steps to revolve the breach during the period of the
Notice. Any outcome from the ruling for the parties deducted from the period
given in the Notice. If the ‘offending’ party took steps in resolving the
breach, but the other party did not follow protocol in the contract by
terminating the contract, the Tribunal may decide the ‘offending’ party may be
entitled to wrongful termination. This also can be the opposite and in favour
of the ‘innocent’ party.
Any recovery of damages will be outlined in the certain
clause of the contract that are not constituted as to be in nature of being
penalised but rather, fairly compensated.
Another circumstance for termination that can be derived without
a Notice can come from the building owner forced into liquidation or demonstration
of that party unable or unwilling to move forward with the contract and subsequent
project. It is then acceptable for the contractor to abandon the project and remove
any personal, equipment or resource away from the project site.