Global events in the last three years have caused – and continue to cause – disruption in financial markets and supply chains, increasing costs of labour, resources, materials and transportation, and a downturn in economic activity generally. The construction industry has felt that impact as much as any other, resulting in delayed or suspended projects, shortage of money to finance projects, insolvency, contractors unable to proceed with construction activities, and the rendering of some projects no longer to be viable. As a consequence, there has been a sharp increase in the number of terminated contracts. This reflects a hardening of attitudes within the market; where a party might seek to cut its losses or where it has run out of patience with its counterparty. In these circumstances, parties need to consider the strategy and the lawfulness of termination, their rights and obligations, and how to ensure that they maximise the recovery of their financial position post-termination.
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