Termination by the Owner for Cause Clause Samples
The 'Termination by the Owner for Cause' clause grants the owner the right to end the contract if the contractor fails to meet specific obligations or breaches key terms. Typically, this clause outlines the types of contractor defaults that justify termination, such as persistent delays, poor workmanship, or failure to comply with project specifications, and may require the owner to provide written notice before proceeding. Its core function is to protect the owner's interests by providing a clear mechanism to remove a non-performing contractor and mitigate further losses or project delays.
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Termination by the Owner for Cause. The Owner may terminate the Contract due to the Contractor's inability to perform for these reasons: • Refusal or failure to supply properly skilled workers or materials; • Disregarding the laws, ordinances or regulations of public authorities having jurisdiction over the Work; or • Substantially breaching provisions of the Contract Documents. If such conditions exist the Owner may, without prejudice of any other rights or remedies of the Owner, after having given the Contractor and the Contractor's surety seven days written notice, terminate the Agreement and, subject to any prior rights of the surety: • Take possession of the site and materials, equipment, tools, and machinery therein owned by the Contractor; • Accept assignment of Subcontracts; and • Finish the work by whatever means are available to the Owner. Should the Work be terminated according to this section the Contractor shall not be entitled to receive further payment until the Work is finished. If the unpaid balance of the Contract Amount exceeds the costs of finishing the work, such excess shall be used to pay the Contractor amounts due for materials and equipment stored on site and Work completed in accordance with the Contract Documents which has been Certified by the Architect/Engineer and accepted by the Owner. If such costs exceed the unpaid balance, the Contractor shall pay the difference to the Owner, which obligation for payment shall survive the termination of the Agreement. The costs of finishing the Work include, without limitation, all reasonable attorney's fees, additional title costs, insurance, additional interest because of delay in completing the Work, and all other direct, indirect, and consequential costs incurred by the Owner by reason of the termination of the Contractor as stated herein. The Owner shall be entitled to hold all amounts due the Contractor at the date of termination until all of the Owner's costs have been established, and to apply such amounts to such costs. Should the Owner's termination of the Contractor for Cause be challenged, and should such challenge prevail, then the Owner's termination of the Contractor shall be deemed to have been a Termination for Convenience, and Contractor's entitlement to compensation shall be determined in accordance with paragraph 3 below.
Termination by the Owner for Cause. § 16.2.1 The Owner may terminate the Contract if the Contractor .1 repeatedly refuses or fails to supply enough properly skilled workers or proper materials;
Termination by the Owner for Cause. 11.2.1 The Owner may terminate the Agreement if the Contractor:
11.2.1.1 Fails to commence the Work in accordance with the provisions of the Agreement;
11.2.1.2 Fails to prosecute the Work to completion thereof in a diligent, efficient, timely, workmanlike, skillful and careful manner and in strict accordance with the provisions of the Agreement;
11.2.1.3 Fails to use an adequate amount or quality of personnel or equipment to complete the Work without undue delay;
11.2.1.4 Fails to perform any of its obligations under the Agreement;
11.2.1.5 Fails to make prompt payments when due to its Subcontractors and Suppliers, or as required by Texas Government Code, Chapter 2251;
11.2.1.6 Files any petition or other pleading seeking any relief under any provisions of the Federal Bankruptcy Act, as amended, or any other federal or state statute or law providing for reorganization of debts or other relief from creditors, permits a receiver or other person to be appointed on account of its insolvency or financial condition, or becomes insolvent;
11.2.1.7 Creates any situation or state of facts which would authorize or permit an involuntary petition in bankruptcy to be filed against Contractor; or
11.2.1.8 Has not met or in Owner’s opinion will not meet the dates of Substantial Completion set forth in the Agreement.
11.2.2 When any of the reasons under Paragraph 11.2.1 exist, the Owner, in its sole and absolute discretion, may without prejudice to any other rights or remedies of the Owner and after giving the Contractor and the Contractor’s surety, if any, thirty (30) calendar days written notice, terminate employment of the Contractor and may, subject to any prior rights of the surety, exclude the Contractor from the Project site and take possession of all materials, equipment, tools, and construction equipment and machinery thereon owned by the Contractor; accept assignment of subcontracts of Contractors subcontractors; and finish the Work by whatever reasonable method the Owner may deem expedient. Upon written request of the Contractor, the Owner shall furnish to the Contractor a detailed accounting of the costs incurred by the Owner in finishing the Work.
11.2.3 When the Owner terminates the Agreement for one of the reasons stated in Paragraph 11.2.1, the Contractor shall not be entitled to receive payment until the Work is finished. In the event that it is determined that sufficient cause did not exist for termination under this Section 11.2, then the termination s...
Termination by the Owner for Cause. § 13.2.2.1 If the Owner terminates the Contract for cause as provided in Article 14 of AIA Document A201–2017, the amount, if any, to be paid to the Construction Manager under Article 14 of AIA Document A201–2017 shall not cause the Guaranteed Maximum Price to be exceeded, nor shall it exceed an amount calculated as follows:
.1 Take the Cost of the Work incurred by the Construction Manager to the date of termination;
.2 Add the Construction Manager’s Fee, computed upon the Cost of the Work to the date of termination at the rate stated in Section 6.1 or, if the Construction Manager’ Fee is stated as a fixed sum in that Section, an amount that bears the same ratio to that fixed-sum Fee as the Cost of the Work at the time of termination bears to a reasonable estimate of the probable Cost of the Work upon its completion;
.3 Subtract the aggregate of previous payments made by the Owner; and
.4 Subtract the costs and damages incurred, or to be incurred, by the Owner under Article 14 of AIA Document A201–2017.
§ 13.2.2.2 The Owner shall also pay the Construction Manager fair compensation, either by purchase or rental at the election of the Owner, for any equipment owned by the Construction Manager that the Owner elects to retain and that is not otherwise included in the Cost of the Work under Section 13.2.
2.1.1. To the extent that the Owner elects to take legal assignment of subcontracts and purchase orders (including rental agreements), the Construction Manager shall, as a condition of receiving the payments referred to in this Article 13, execute and deliver all such papers and take all such steps, including the legal assignment of such subcontracts and other contractual rights of the Construction Manager, as the Owner may require for the purpose of fully vesting in the Owner the rights and benefits of the Construction Manager under such subcontracts or purchase orders.
Termination by the Owner for Cause. § 13.2.2.1 The Owner may terminate the Contract if the Design-Builder .1 fails to submit the Proposal by the date required by this Agreement, or if no date is indicated, within a reasonable time consistent with the date of Substantial Completion; .2 repeatedly refuses or fails to supply an Engineer, or enough properly skilled Consultants, Contractors, or workers or proper materials;
Termination by the Owner for Cause. § 14.2.1 The Owner may terminate the Contract if the Contractor
Termination by the Owner for Cause. § 13.2.2.1 The Owner may terminate the Contract if the Design-Builder .1 fails to submit the Proposal by the date required by this Agreement, or if no date is indicated, within a reasonable time consistent with the date of Substantial Completion; .2 repeatedly refuses or fails to supply an Architect, or enough properly skilled Consultants, Contractors, or workers or proper materials; .3 fails to make payment to the Architect, Consultants, or Contractors for services, materials or labor in accordance with their respective agreements with the Design-Builder; .4 repeatedly disregards applicable laws, statutes, ordinances, codes, rules and regulations, or lawful orders of a public authority; or .5 is otherwise guilty of substantial breach of a provision of the Design-Build Documents.
§ 13.2.2.2 When any of the above reasons exist, the Owner may without prejudice to any other rights or remedies of the Owner and after giving the Design-Builder and the Design-Builder’s surety, if any, seven days’ written notice, terminate employment of the Design-Builder and may, subject to any prior rights of the surety:
.1 Exclude the Design-Builder from the site and take possession of all materials, equipment, tools, and construction equipment and machinery thereon owned by the Design-Builder; .2 Accept assignment of the Architect, Consultant and Contractor agreements pursuant to Section 3.1.15; and
Termination by the Owner for Cause. Notwithstanding any other provision of these General Conditions, the Work or any portion of the Work may be terminated immediately by the Owner for any good cause after giving seven (7) days advance written notice and opportunity to cure to the Prime Contractor, including but not limited to the following causes:
Termination by the Owner for Cause. 12.2.1. Time Frame and Reasons 12.2.2. Owner’s Rights 12.2.3. Payment 12.2.4. Balance
Termination by the Owner for Cause. 14.2.1 The Owner may terminate the Contract if the Contractor:
14.2.1.1 Repeatedly refuses or fails to supply enough properly skilled workers or proper materials;
14.2.1.2 Fails to make payment to Subcontractors for materials or labor in accordance with the respective agreements between the Contractor and the Subcontractors;
14.2.1.3 Repeatedly disregards laws, ordinances, or rules, regulations or orders of a public authority having jurisdiction; or
14.2.1.4 Otherwise is guilty of substantial breach of a provision of the Contract Documents.
14.2.2 When any of the above reasons exist, the Owner, after consultation with the Program Manager and the Architect that sufficient cause exists to justify such action, may without prejudice to any other rights or remedies of the Owner and after giving the Contractor and the Contractor's surety, if any, seven (7) days' written notice and an opportunity to cure, terminate employment of the Contractor and may, subject to any prior rights of the surety:
14.2.2.1 Take possession of the Project site and of all materials, equipment, tools, and construction equipment and machinery thereon owned by the Contractor;
14.2.2.2 Accept assignment of subcontracts pursuant to Paragraph 6.4; and finish the Project Work by whatever reasonable method the Owner may deem expedient;
14.2.3 When the Owner terminates the Contract for one of the reasons stated in Subparagraph 14.2.1, the Contractor shall not be entitled to receive further payment, except as provided in subparagraph 14.2.4 after the Project Work is completed.
14.2.4 If the unpaid balance of the GMP exceeds costs of finishing the Project Work, including compensation for the Program Manager's and Architect's services and expenses made necessary thereby, such excess shall be paid to the Contractor. If such costs exceed the unpaid balance, the Contractor shall pay the difference to the Owner. The amount to be paid to the Contractor or Owner, as the case may be, shall, upon application, be certified by the Architect after consultation with the Program Manager, and this obligation for payment shall survive termination of the Contract.
