Contractor has failed to meet deadlines throughout contract.
Now Completion Date has been missed and progress on outstanding works is unsatisfactory.
Can Employer now terminate contract without notice, and if so are there financial consequences to them?
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I am assuming this is an ECC contract, but there are similar provisions in all NEC3 contracts and in all cases, in section ‘9. Termination’ of the contract
Failure to meet the Completion Date is not a reason for termination in itself. The most relevant reason is listed under clause 91.2 reason R11, where the Contractor has “substantially failed to comply with his obligation”. This is in itself is not a reason to terminate as there are other express provisions e.g. X7 Delay damages as a remedy.
However, you state that they have failed to meet deadlines throughout the contract and, reading between the lines, when you “progress on outstanding works is unsatisfactory”, it implies to me that you think are failing to resource and manage it properly. Taken together, this could - and I stress could - mean they are insubstantial default.
If - and I stress ‘if’ - this is the case then do NOT terminate with immediate effect. Instead give notice, as per clause 91.3, and if they have stopped defaulting after 4 weeks, then the Employer may terminate.
If you do not follow this procedure - or if the Contractor is not in substantial default - then you will probably be liable for monies to the Contractor as opposed to the other way around.
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