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OnDemand Course

Terminating a Construction Subcontractor: The Big Issues

Learn about the issues you need to consider in drafting and negotiating subcontract termination provisions and utilizing them during performance.

Nobody wants to think about subcontract terminations until they absolutely have to. That's a big mistake. A contractor's failure to carefully consider termination rights and obligations when they draft and negotiate their subcontracts can put the contractor in a very difficult position during project performance, and failure to ensure its project management understands those rights and obligations throughout performance can lead to missed notices, waived rights, and unnecessary liability to the subcontractor, the owner/customer or both. This information helps construction contractors and their counsel recognize the issues to consider in drafting and negotiating subcontract termination provisions and provides essential tips for making sure those provisions meet the contractor's needs and tolerance for risk. It also provides a roadmap for navigating potential termination issues that arise during performance and, when the decision to terminate is made, how to do so effectively and efficiently. You will be able to discuss with your clients' contracting teams best practices in negotiating and drafting termination provisions and deciding if, how and when to use them during performance; you will be able to identify the steps you should take in deciding whether to terminate and, if so, how to do so effectively and efficiently; you will be able to recognize the risks, benefits and likely consequences of terminating a subcontractor; and you will be able to review your form and draft agreements and customize their termination provisions to match your needs and tolerance for risk.

Learning Objectives

  • You will be able to discuss with your or your clients’ contracting teams best practices in negotiating and drafting termination provisions and deciding if, how and when to use them during performance.
  • You will be able to identify the steps you should take in deciding whether to terminate and, if so, how to do so effectively and efficiently.
  • You will be able to recognize the risks, benefits and likely consequences of terminating a subcontractor.
  • You will be able to review your form and draft agreements and customize their termination provisions to match your needs and tolerance for risk.

89 minutes
Course Exam
Certificate of Completion
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Why Lorman?

Over 35 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

Agenda

Deciding Whether to Terminate - Key Legal Questions to Ask

  • What Does the Subcontract Say About the Right to Terminate?
  • Does the Prime Contract Say Anything Different?
  • How Does Statutory or Common Law Fill in Any Blanks or Alter the Parties' Respective Rights?

Deciding Whether to Terminate - Key Factual Questions to Ask

  • Has the Subcontractor Failed to Perform in Some Material Way, and, If so, What Caused It?
  • Has the Owner Altered, Terminated or Otherwise Deleted Any of the Prime Contract Affecting the Subcontractor's Scope?
  • Has the Owner or Its Representative or Design Team Contended That the Subcontract Work Has Been Deficient?

The Mechanics, Considerations and Consequences of Termination

  • Terminations for Cause/Default: Typical Provisions/Requirements; Rights in the Absence of a Clause; Consequences of Getting It Wrong; Results of Getting It Right; Practical Considerations
  • Terminations for Convenience: Typical Provisions/Requirements; Rights in the Absence of a Clause; Consequences of Getting It Wrong; Results of Getting It Right; Practical Considerations
  • Other Types of Terminations (e.g. Cancellations Upon Specified Conditions)
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Why Lorman?

Over 35 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

Credits

OnDemand Course

This course was last revised on March 21, 2019.

Call 1-866-352-9540 for further credit information.

No Credit Available

This program does NOT qualify, nor meet the National Standard for NASBA accreditation.

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Why Lorman?

Over 35 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

Faculty

Aaron Silberman

Aaron Silberman

Rogers Joseph O'Donnell

  • Partner in the San Francisco office of Rogers Joseph O’Donnell, PC
  • Practice emphasizes all aspects of construction law and government contracting
  • Conducts regular seminars and workshops and has authored numerous publications on construction and public contract law subjects, such as terminations, subcontracting, bid protests, and false claims, cybersecurity, Building Information Modeling (BIM), green building, energy savings performance contracts, IT procurements, abandonment/cardinal change claims, disabled access, and licensing
  • ABA public contract law section, immediate past chair, former section council member, past chair of federal procurement, state and local procurement, and construction divisions and procurement fraud and subcontracting committees; ABA Forum on Construction Law, publication committee immediate past chair, past governing committee member, and specialty trade contractors and suppliers division chair; AGC-California, Bay Area District Board of Directors member and past chair, past Legal Advisory Committee chair and executive committee member
  • Recognition in Super Lawyers, construction litigation, Northern California; Who’s Who Legal, thought leader, construction, U.S.; Chambers, noted practitioner, government contracts, U.S.
  • J.D. degree, with honors, the University of California Los Angeles Law School; B.B.A. degree, with honors, the University of Michigan
  • Can be contacted at [email protected]
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Product ID: 405150
Published 2019
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