Determination in construction contracts
The term ‘determination’ in relation to construction contracts relates ending the contractor’s employment under the contract. Contracts may provide for determination of the contractor’s obligations under the contract by the employer or the contractor if there is a breach of contract by the other party.
This may happen if one of the parties has ceased to perform their obligations under the contract, for example, if the contractor is no longer proceeding regularly and diligently with the works.
However, the contract itself remains in place, and so do the rights of both parties.
This is as opposed to the termination of the contract, which brings the contract itself to an end. This may happen, for example, if one of the parties to the contract behaves in such a way that it indicates it no longer intends to accept its obligations under the contract, this is considered to be a repudiatory breach (or fundamental breach) allowing the innocent party to terminate the contract and to sue for damages.
For more information, see Repudiatory breach in construction contracts and Termination.
See also: Expert determination.
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