Sometimes in the heat of a disagreement, a contractor may indicate the contract is flawed and continued performance would be futile in the absence of a contract modification. This type of statement is dangerous, as it may later be interpreted as a repudiation of the contract. Anticipatory repudiation is a breach, justifying a termination for default by the project owner.
In a recent case, a contractor wrote that it had exhausted all means of bringing a project into compliance with contractual performance standards. The specifications were flawed and the contractor was ceasing performance until further notice. Was this a repudiation of the contract by the contractor? That was the contention of the project owner after it terminated the contract for default.
What are your practices in a situation such as this? It is possible to forcefully advocate your position without threatening a work stoppage or demanding a change order as a condition for continued performance. What policies do you have in place to avoid crossing this line?
What are your practices in a situation such as this? It is possible to forcefully advocate your position without threatening a work stoppage or demanding a change order as a condition for continued performance. What policies do you have in place to avoid crossing this line?
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Don't miss, In the upcoming issues of Construction Claims Advisor . . . case summaries and articles covering:
- Contractor’s Complaints were not Repudiation of Contract
- “Responsive” Proposal not the Same as a responsive Bid
- Reciprocal waiver applied to Separate Prime Contractor
Bruce Jervis, Esq., Senior Editor
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