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Claims: why is notice required before a certificate of termination is issued

0 votes
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The Contractor has notified the Subcontractor of termination, including all information relating to reason, procedure and payment.

Is a certificate of termination still required, or does the notification serve as such certificate.
asked Nov 9, 2018 in Contractor Claims by Big Al (240 points)  

1 Answer

+2 votes
Assuming the subcontract is based on the Engineering and Construction Subcontract, the Contractor appears to be complying with clause 90.1 in notifying and giving details of his reasons. Following notification this clause requires the Contractor to issue a termination certificate provided the reason for termination complies with the subcontract.

The contract details the reasons for termination, the procedures to be followed, and how to calculate any amounts due. It's vital for the Contractor that the notification and certification is conducted strictly in accordance with the contract otherwise he could be committing a repudiatory breach of contract which would then entitle the Subcontractor to terminate.

It does seem a little bizarre that when the Contractor instigates the termination with a notice, he then has to decide if he did it properly and if so issue a certificate. It would make more sense for the Contractor to just be able to issue a certificate in this scenario, can you ever envisage a Contractor deciding that their own notice wasn't in accordance with the contract?!
answered Nov 9, 2018 by Neil Earnshaw (20,620 points)  
Bizarre indeed. possibly sloppy carrying over from the ECC, where there is a PM.. Maybe good material for a Z clause.
One is inclined to wonder if the contractor had good grounds for cancellation and missed the boat due to confusion with the conflated notice/certificate, if the payment s due could suddenly increase, perhaps with an (unwarranted?) A4?