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Mutual termination or cancellation of a building contract
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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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.