What are grounds for the Contractor to terminate the Contract?

Termination of a contract by the contractor is valid under certain circumstances, and one of the most significant grounds is non-payment by the owner after the contract has commenced. When an owner fails to make timely payments for work performed as outlined in the contract, it creates a breach of the contract. This places the contractor in a difficult position, as they are expected to uphold their end of the agreement by providing labor and materials while not receiving due compensation.

In such situations, the contractor is justified in terminating the contract as it ensures that they are not left bearing the financial burden of continuing work without payment. This action serves to protect the contractor’s rights and interests, adhering to the principle of mutual contractual obligations, where both parties are expected to fulfill their duties as agreed upon.

In contrast, issues such as a lack of available subcontractors, rejection of materials, or lack of owner’s approval do not typically constitute grounds for contract termination. These issues could potentially be managed and resolved through communication and negotiation, rather than necessitating termination of the entire contract.