What if my subcontract was wrongfully terminated?
It may itself be a repudiatory breach, a breach serious enough to end your subcontract, and you may be able to claim what you lost.
Updated: . By Jack Butler-Kettle, Construction Claims Consultant.
The answer
A termination can be wrongful if it had no proper ground, or did not follow the steps your subcontract sets. Whether yours was is a legal question for your solicitor. They will look at the grounds, the notices, how they were served and what each side did next. If it was wrongful, your claim is for your loss. That usually means the value of work done and unpaid, and wasted costs such as materials ordered for the rest of the job. It also covers the profit you would have made on the work left, less what you saved by not doing it. Those figures come from the same records as a termination account: the work done, the payment history, your tender build-up and your cost records. So gather them now, while your solicitor looks at validity.
Example
Illustrative example. The scenario and figures are invented.
The facts
A subcontractor's solicitor advises that its subcontract was terminated without the notice the subcontract requires, and asks for the figures behind a claim.
What happens
- The work done is measured and the unpaid balance checked against the payment history.
- The cancellation charges on materials ordered for the rest of the job are gathered from the suppliers' invoices.
- The profit on the work left is taken from the tender build-up, less the costs saved by not doing it.
The outcome
The solicitor argues the breach with each part of the loss already built and traced to a document.
Where your subcontract has ended, our Termination Claim builds the money side, whichever way the question of validity is answered.