At the start of the pandemic, there were a lot of confused contractors and trades trying to work out if they could leave site. The virus was deadly and construction sites couldn’t really enforce a 2m rule for social distancing. But can you place the project in limbo and stop work temporarily?
The Limbo Clause
How are you at treading the high-wire? I’m asking because it is nearly as hard as treading the fine line between suspending works and abandoning the project. Because of this, my 500-word contracts do not include a right to suspend carrying out the works. Your alternatives are statutory suspension, termination, or variation.
Option 1: Statutory Suspension
Under English law, if you are working under a construction contract (any works/services contract related to a construction project), then you have a statutory right to suspend any or all of your duties if you don’t get paid in full on time. You must give at least 7 days’ notice to the errant payer of your intention to suspend explaining why you have that right (the grounds for suspending). Suspension does tend to get you the payer’s attention in a way that stroppy emails don’t.
This is a powerful tool to deal with a worldwide key cause of friction. You can suspend all of your duties and ‘down tools’… but a ‘softer’ alternative is to suspend some of your duties such as insuring the works, applying for consents, carrying out new instructions or withdrawing your copyright licence. These provide sufficient leverage without completely undermining the project or your reputation.
Option 2: Termination
Abandoning a project doesn’t mean one day away, but days and days… with no intention of returning to site. Refusing to perform the work (abandoning) is a fundamental breach of contract as it indicates you no longer intend to comply with your duties under the contract. If the other party agrees and treats the contract as at an end, it is now terminated.
Option 3: Negotiation
If all else fails, you will have to sit down and agree a new deal. Any contract can be varied. If there is a mechanism within your contract, please follow it. If not, you’ll need to follow the essentials for a new contract – as well as agreeing how to end the existing one. Whatever you do agree, get it in writing and ideally signed by both parties – this is a panacea for forgetfulness.
