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Mutual termination or cancellation of a building contract

Find out what grounds exist for cancelling a building contract and how to use a deed of mutual termination when deciding to terminate a contract.
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There are a number of reasons why a building contract may need to be terminated or cancelled. Terminating a contract should not be entered into lightly and there a number of ways it can be done.

A contract is typically terminated by one of the following means:  

  • Termination by performance – Is when a contract has come to a natural end and both parties have met their obligations under the terms of the contact. A deed of mutual termination is not needed in this instance. 
  • Termination by breach  – When one party breaches the contract, the other party may decide to terminate the contract. 
  • Termination by agreement – Is when both parties wish to terminate the contact by mutual decision. A deed of mutual termination may be used for both a termination by breach and a termination by agreement. 

This resource defines what a deed of mutual determination is and when it should be used. A case study is provided in which a home owner and a builder agree to terminate a contract after being in dispute about the date for the completion of the works. 

Also contained in this resource are details about what needs to be included in a deed, as well as an explanation of what happens when there is a breach of the deed.

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FREE

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Didn’t find what you were looking for?

Who is it for?

Building Professionals

This resource is designed for builders and industry professionals who want to know more about cancelling or terminating a building contract.

What does it include?

  • How a contract is terminated
  • What a deed of mutual termination is
  • When a deed of mutual termination should be used
  • What should be included in a deed
  • What happens when there is a breach of the deed.

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