Contract Suspension Agreement

The unprecedented nature of the coronavirus pandemic has undoubtedly caused disruption to businesses in a large number of sectors. Many companies need to review their existing contractual relationships and assess whether there are measures that can be taken to minimize their expenses in the short and medium term. Does the coronavirus enter the list of events indicated in my contract? These definitions mean that a variation is a physical change in the delivered works, not a change in time, order or method of performing them. The underlying logic is that there are other contractual mechanisms that offer appropriate rights and facilities for such modifications. This guide deals with contractual and non-contractual rights to terminate a construction contract. Contractual rights may include the right to terminate „as will” if there is no breach by the other party. Difficulties may arise if the innocent party accidentally confirms the treaty, instead of accepting the refusal, acting in a manner contrary to acceptance or ambiguous in one way or another. It may be contrary to the treaty if it terminates the performance of its obligations in the mistaken belief that it has accepted the reluctant breach. As a general rule, certain extreme types of infringements constitute a clear refusal of a construction contract. For example, it may be worth considering whether or not you have insurance that would cover non-performance due to an unforeseen event such as the coronavirus pandemic. It also depends on the wording of your policy and it is advisable to contact your insurer before taking any steps to terminate or suspend the contract. Most commercial works contracts allow the Superintendent to give instructions (in accordance with the contract) and, as a general rule, to provide for a unilateral right to the grant of an EOT.

Following the example of the standard form AS4902-2000, Article 32 provides that the justification for a suspension is largely similar to termination. For example, there may be a change in circumstances that makes it impossible to continue the performance of the contract. While the exercise of rights under the aforementioned clauses may lead the contractor to delay or delay the execution of the works, it must be exercised with caution for two reasons: if deficiencies are found during the management of the contract, the first step is to address the problem orally with the other party. If the results of this oral communication are not satisfactory, this should be formally notified and the opposing party given a certain period of time to remedy (cure) the deficiency. If the defect is not corrected within the time limits, the suspension or termination of the contract should be considered taking into account other available remedies. A reference to the suspension of a contract in the event of an „event of force majeure”, without a definition of what the parties envisage as an „event of force majeure”, is probably not sufficient and, for reasons of insecurity, probably cancelled. It is important to distinguish between the suspension of a contract (the temporary termination of the performance of the contract) and the suspension of a supplier, contractor or service provider.