Changing contractors or architects once the construction has already started raises practical and legal issues which can be anticipated in the contract documentation.

As a matter of principle, the client is contractually bound to the architect and the construction company until the end of the term agreed in the works contract, i.e., in most cases, until the reception of work.

However, this does not mean that the contracting parties are obliged to remain bound until the end of the agreed term in the event of disagreement, and in particular in the event of professional failure of the architect or the contractor, not carrying out the work in accordance with the rules of the trade, or failing to meet the deadlines agreed under the contractual obligations.

Nevertheless, such a situation raises practical questions regarding the termination of the contract, the means of fulfilment of obligations, and the track record of existing and future perturbations. This situation can be anticipated at the contract stage, including a resolutory clause and the framework provisions for the responsibilities of the parties involved.

The resolutory clause

In order to avoid seeking judicial termination of the contract or facing the risks of unilateral termination, it may be preferable to include a clause in the contractual documentation providing for an option for termination of the works.

Such a clause must be drafted carefully and precisely, specifying in particular the grounds for termination, the procedure to be followed and its consequences.

Definition of the grounds for termination

The grounds for termination must be precisely defined in order to provide a clear framework for cases of termination. Such provisions may be made for termination of the works contract in the event of abandonment of the site, provision of materials of poor quality or the occurrence of an event of force majeure. Each of these situations must be precisely defined in the agreement.

As we commented in one of our previous articles, the current health crisis, and more particularly the application of force majeure, proves the necessity of precisely defining the grounds for termination of a works contract, otherwise it cannot be applied.

Determining the procedure to be followed

The procedure to be followed must also be precisely defined in order to ensure its effectiveness. For instance, it is possible to provide for the sending of a formal notice 15 days before the termination becomes effective or the need to deliver a summons by bailiff.

Consequences

It is strongly recommended to anticipate the consequences of the implementation of a resolutory clause. In this context and by way of example, the settlement of the outstanding payments under the contract, the application of any penalties or the application or even the capping of certain indemnities may be regulated.

Anticipation of shared liability

The contractual framework of the right of termination also implies anticipating the existence of shared responsibility.

To this end, it is recommended, when drafting the contractual documents, to :

  • ask about the architect's or company's right to subcontract certain services ;
  • demand to be informed about certain insurance policies, or even impose the obligation to maintain such policies.

In addition, the existence of discrepancies in the scope of the services provided or in the equipment supplied can be anticipated by including in the contractual documentation the obligation of the parties to draw up a report on the acceptance of the services provided by the company whose contract is terminated, or even to proceed with a joint expert opinion.

Whether or not these drafting precautions were taken before launching of the works, the client may find herself / himself in a situation of contractual defects and breaches of the rules of the art, requiring consideration of (i) the possibility of termination of the works contract and/or the contract with the counterparty, (ii) the responsibilities of each party, and (iii) the legal actions to be taken or defended.

This analysis will be imperative before any decision is taken on the works contract and the architect's contract, and before entrusting the site to any third party.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.