Construction Contract Termination Lawyer in New York City

Construction contracts are usually terminated due to significant breaches such as failure to meet quality standards, chronic project delays, non-payment issues, safety violations, or abandonment of the work. Other common reasons in the construction industry include violations of building codes, inadequate workmanship that can’t be remedied, or material shortages that prevent project completion.

Before terminating, owners and general contractors should carefully review the contract terms under New York law to understand what constitutes grounds for termination and whether notice or an opportunity to cure is required.

Regardless of the circumstances, it’s crucial to consult a construction attorney before you consider terminating a contract. Richman Law Firm PLLC represents clients from contract drafting through litigation. Contact us today for a free consultation.

Termination for Cause

This term refers to a situation where owners, contractors, subcontractors, architects, or engineers fail to fulfill contractual obligations, leading the other party to terminate the contract. This can occur for various reasons:

Defective Work

One of the most common reasons for terminating a contract is defective work, when the contractor fails to meet the standards outlined in the contract, uses substandard materials, or doesn’t adhere to building codes and regulations.

Delays

Another common reason for termination is significant delays in the project’s completion. While some delays are inevitable in construction, chronic or unreasonable delays that affect the project timeline can lead to termination.  The contract typically specifies what constitutes a delay and the remedies available. If the delay is deemed inexcusable, the property owner may have the right to terminate the contract.

Fraud & Construction Contracts

Misrepresentation by a contractor can be grounds for contract termination. This can include dishonesty about qualifications, misrepresenting costs, or falsifying progress reports. In such cases, the aggrieved party is entitled to terminate the contract and may seek damages.

Breach of Contract

When one party fails to fulfill obligations outlined in a contract, this can include failure to complete work on time, not adhering to the project budget, or failing to meet quality standards. In the aftermath of a contract breach, the non-breaching party may be able to terminate the contract and seek legal remedies such as damages or enforcement of specific performance according to the contract terms.

Termination for Convenience

This type of termination can occur even if the contractor has not breached any contract terms. The reasons can vary:

Changes in the Project Scope

The scope of a construction project can change due to design modifications, changes in building codes, or changes in the owner’s needs or financial situation. If these changes are significant enough, they may lead to a termination for convenience. The original contract may no longer be suitable or viable under the new scope, and a fresh agreement may need to be negotiated to accommodate these changes.

Funding Issues

In some cases, financial issues may prevent the project from continuing. This could be due to changes in funding circumstances, lack of investor support, or unforeseen costs. In such cases, the owner may terminate the contract for convenience. However, this usually involves compensating the contractor and other parties involved for work already completed and possibly for anticipated profits on unperformed work.

Regulatory Changes

Regulatory changes can lead to termination for convenience. Changes in local, state, or federal regulations may impact the feasibility or legality of continuing a project as initially planned or following building codes, zoning laws, or environmental regulations. If these changes make it impossible or financially unfeasible to continue the project as planned, the owner may decide to terminate the contract.

Unforeseen Liabilities

Unforeseen liabilities can arise during a construction project, making it necessary to terminate the contract. These can include the discovery of hazardous conditions or significant structural problems that were not known at the start of the project. These liabilities can increase the cost or time required to complete the project, making termination for convenience a viable option.

Before Terminating a Contract

Before deciding to terminate a contract, there are several steps you should take to protect your interests and minimize potential legal disputes.

Document What You Can: Documentation is crucial. Gather all relevant documents, including the original contract, invoices, receipts, and progress reports. Also, document specific instances of breach or non-performance with dates, details, and supporting evidence.

Evaluate How Much of the Work Has Been Completed: Understanding the extent of the work completed before termination helps determine the compensation owed to the contractor for work already done and materials already purchased. It also helps assess whether continuing with the current contractor is more beneficial than seeking a new one.

Consult an Attorney with Experience on How to Terminate a Contract: A construction attorney may provide guidance and help you understand the possible legal and financial implications of contract severance. They might also review your contract, assess the situation to avoid further disputes, and advise on the best course of action.

Contact Us for a Free Consultation

If you’re considering terminating a construction contract. Richman Law Firm PLLC helps clients evaluate their options and weigh the termination of construction contracts. Whether you’re dealing with defective work, delays, fraudulent activity, or other issues leading to contract termination in New York City, contact us today for a free consultation.

Frequently Asked Questions

Can I fire my contractor mid-project?

Whether you can fire a contractor legally depends on your contract and the reasons for firing. Most construction agreements allow termination “for cause” when the contractor commits a material breach—such as abandoning the project, consistently missing deadlines, or producing substandard work. Some contracts include “termination for convenience” clauses that let owners end the relationship without proving fault, though this requires specific notice periods and payment for work completed.

What’s the proper process for terminating a contractor?

Understanding how to terminate a contract with a contractor typically involves (1) reviewing the contract’s termination clauses to understand rights and obligations, (2) documenting all performance issues with photos, correspondence, and inspection reports, (3) providing written notice that specifies the breach and any cure period, (4) allowing the contractor time to remedy the issues if required, and (5) formally ending the relationship in writing if problems persist. Skipping these steps can expose you to liability even when the contractor’s performance is clearly deficient.

How to fire a contractor and get money back?

This depends on why the contract ended and what damages you can prove. If the contractor breached the agreement through defective work or abandonment, you may recover through (1) withholding remaining contract payments, (2) making a claim against the contractor’s performance bond if one exists, (3) negotiating a settlement that accounts for incomplete or deficient work, or (4) pursuing arbitration or litigation to recover repair costs and additional expenses.

Should I use mediation, arbitration, or go to court?

Many construction contracts include alternative dispute resolution clauses that require mediation or arbitration before you can file a lawsuit. Mediation involves a neutral facilitator helping parties resolve disputes, while arbitration works like a private trial where an arbitrator makes a binding decision. These alternative methods can resolve disputes faster than litigation. However, if the contract doesn’t mandate these approaches or they’ve been exhausted without resolution, a court may be necessary—particularly for complex liability issues.

When should I consult a construction attorney?

Contact a construction contract termination lawyer when: (1) you’re considering ending a contract and want to understand your rights and risks, (2) you’ve received a termination notice from another party, (3) disputes over payment, delays, or quality issues might lead to termination, (4) you need help understanding termination provisions and cure requirements, or (5) you’re facing claims after a contract has ended.