Contract Termination Lessons From NY Construction Ruling

By Bradley Pollina (November 2, 2021, 5:03 PM EDT) -- Construction subcontracts generally specify reasons for which a general contractor can terminate a subcontractor.

Among other termination rights, a contractor is typically permitted to terminate its subcontractor "for cause," including most commonly the subcontractor's performance of deficient work or its failure to meet the project schedule.

For example, the American Institute of Architects Document A401-2017 Standard Form of Agreement Between Contractor and Subcontractor generally permits a termination of the subcontractor for cause if "the Subcontractor repeatedly fails or neglects to carry out the Work in accordance with the Subcontract Documents or otherwise to perform in accordance with this Subcontract."[1]

Although this...

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