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Construction Law/Suspension followed by Termination

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Question
Good day,

I have a Contract governed by English Law.

The Contract contains a clause for termination (stipulating costs based on time), but no clause for suspension.
The client suspended the contract and paid a fee for this suspension. The client now wishes to cancel the contract, does the fee already paid in terms of the suspension cancel out / pay towards the cancellation fee..
If the suspension was paid in terms of potential damages, has this not then already been accounted for?

Answer
Dear Melanie,

Thank you for this question.

You are correct to identify that the purpose of the sums paid in respect of the suspension can be relevant to the total level of damages flowing from the subsequent termination. The matter will turn on the purpose for which the previously paid sums were disbursed.

If the sums paid previously were, for example, in compensation only for temporary demobilisation and standing time then such are not relevant to the damages to be paid for termination.

If you can give more information relating to this I may be able to provide a more definitive position statement for you.




I hope that this assists you.

Kind regards,
John Dowse

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Construction Law

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John Dowse

Expertise

Legal; contract interpretation; quantum; delay analysis. Practitioner in arbitration, adjudication and mediation.

Experience

Thirty-three (33) years experience in building and construction, at all levels both within contracting and consulting organisations. Practising arbitrator, adjudicator, and mediator. Faculty approved trainer for the Chartered Institute of Arbitrators. Lecturer on construction contract forms and dispute resolution practices.

Organizations
Chartered Institution of Civil Engineering Surveyors Chartered Institute of Arbitrators Institute of Directors Society of Construction Arbitrators

Publications
Various UK and International construction and legal publications.

Education/Credentials
LLB (Hons), Pg Dip (Legal Practice), MCInstCES MCIArb MIOD Barrister

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