Q: What should I do to recoup funds owed by a client that has terminated our contract?
We are a small CBC in Florida and have recently had a long standing customer decide to terminate a contract that was in their opinion taking to long to complete. At their request we made changes to the construction documents specifications about locations and layout to the MEP's of the building. This in turn has caused delays that we were hoping to rectify with AS BUILT drawing revisions. Unfortunately the inspectors have deemed that we are too far from the specifications and need to submit for revisions prior to passing the rough in inspections. This process took a very long time, and the client made their decision to terminate. However the changes were clearly their request, and their cost. They became unresponsive and would not return communication until their ultimatum deadline had expired. Who do we contact for dispute resolution? They are a much larger business that is publicly traded and we wouldn't be able to compete with them in a legal battle.
A: Construction contracts are often very complex. There are so many different ways they can be drafted, it is impossible to answer your question without reviewing the contract. Many construction contracts have what is called "Termination for Convenience" which essentially means the other side can terminate the contract for any reason. If that clause exists, there should be language in the contract that specifies what happens if this option is taken by the other side. The contract usually also spells out what kind of damages you are entitled to, if any, when a contract is terminated. I strongly recommend you contact a construction attorney to help with this.
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