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Webinar Replay: Breaking Up Is Hard to Do: Termination of California Construction Contracts
August 1, 2023 @ 12:00 pm – 1:33 pm
1.5 Participatory MCLE Credits
“Breaking Up Is Hard to Do: Termination of California Construction Contracts” will discuss all of the major issues that owners and contractors face regarding contract terminations on California construction contracts. The agenda will cover 1) Drafting and negotiating contract termination provisions; 2) Deciding if, how and when to terminate during performance; and 3) The mechanics, considerations and consequences of termination.
We’ll introduce the different types of termination clauses, and, for each, discuss the most common issues, examples and considerations and tips, both in the context of owner-prime agreements and prime-subcontractor agreements. The focus will be on the two most common types of contract terminations: those for default/cause and those for convenience/no cause; we will also cover cancellations and terminations by the contractor.
For default terminations, issues include the bases for termination, required notices and opportunities to cure, owner/contractor remedies, and the effect of an improper termination, and, for convenience terminations, issues include the breadth of the right to terminate and enforceability. For both terminations types, we’ll examine sample language and procedures, and we’ll discuss drafting considerations and tips. For cancellation and termination-by-contractor provisions, we’ll discuss when they are utilized, on what conditions and other issues.
We will then turn to deciding if, how and when to terminate during performance. Key subtopics are a) Key legal questions to ask; b) Key factual questions to ask; and c) The mechanics, considerations and consequences of termination. Among key legal questions are what the contract documents say about the right to terminate and how statutory and common law fill in any blanks or alter the parties’ respective rights; this discussion will include California restrictions on construction subcontractor substitutions.
We’ll conclude with practical and strategic considerations in whether and how to terminate and, if a termination is noticed, whether and how to challenge a termination and/or make a claim for recovery.