Suspension and Termination in Construction Contracts: A Case Study

This case study addresses the issue of whether Jill can suspend a contract based on statutory provisions, particularly concerning non-payment. It references Section 112 of the Housing Grants and Regeneration Act 1996 (HGCRA) and clause 4.14 of JCT SBC/Q 2011, which allow a contractor to suspend work if payment is overdue. The Mayhaven Healthcare Ltd v Bothma case is cited to illustrate a real-world scenario. The analysis applies these rules to Jill's situation, considering an amendment to the contract requiring a 30-day notice before suspension. It advises Jill to adhere to contractual provisions to avoid breach but acknowledges her right to serve a 7-day notice and enter into dispute, with the courts ultimately deciding the recovery of her interests based on JCT SBC/Q 2011, HGCRA, and LDEDC. The conclusion asserts that Jill can suspend the contract in accordance with the aforementioned acts.

Running head: SUSPENSION AND TERMINATION
Suspension and Termination
Name of the Student
Name of the University
Author Note

1SUSPENSION AND TERMINATION
Issue:
The issue in this case study is regarding the fact that whether Jill can suspend the contract
according to the provisions depicted in the statute.
Rule:
According to Section 112 of the Housing Grants and Regeneration Act 1996 (HGCRA)
the contractor possesses the right to suspend the work if the payment is due on the part of the
payee i.e. the payee has not completed the payment1. In this regard, clause 4.14 of JCT SBC/Q
2011 can be referred which acts parallel to the (HGCRA) which permits the contractor to
suspend the performance of his liability, if the due payment is not made by the employer before
or on the completion of the final date under the contract2. However, if the employer failed in his
part to make the final payment and do not provide remedy to the incident after the Contractor
served a seven day notice of intention to suspend the work, then in such cases, the provisions of
notice allows the Contractor to take necessary steps to solve the dispute. In Mayhaven
Healthcare Ltd v Bothma [2009] EWHC 2634 (TCC)3, it was observed that the work was
suspended by Bothma who was a contractor, due to non-payment on the part of the employer.
Part 8 of the Local Democracy, Economic Development and Construction Act 2009 (LDEDC)
amended the (HGCRA) 1996 to reinforce rights for the contractors in order to suspend contract
for non-payment.
Application:
1 Hinchey, John. "Dispute Resolution." Advice from Those Who’ve Been There, Done
That (2013): 229.
2 El-adaway, Islam, et al. "Administering extension of time under national and international
standard forms of contracts: A contractor’s perspective." Journal of Legal Affairs and Dispute
Resolution in Engineering and Construction 8.2 (2016): 04516001.
3 [2009] EWHC 2634 (TCC).

2SUSPENSION AND TERMINATION
It can be observed that the contract was amended by Jack with an agreement with Jill. As
mentioned in the contract, a 30 day noticed has to be provided by the contractor before
suspending the work. Therefore it can be advised to Jill that she should act according to the
provisions of the contract in order to avoid breach of contract. However, if Jill intends to serve 7
days notice to Jack and enter into dispute, then in such cases the courts will be at the authority to
decide that how Jill can recover her interests based on the provisions of JCT SBC/Q 2011,
HGCRA and LDEDC.
Conclusion:
Jill can suspend the contract according to the provisions of the abovementioned Acts.

3SUSPENSION AND TERMINATION
Bibliography:
El-adaway, Islam, et al. "Administering extension of time under national and international
standard forms of contracts: A contractor’s perspective." Journal of Legal Affairs and Dispute
Resolution in Engineering and Construction 8.2 (2016): 04516001.
Hinchey, John. "Dispute Resolution." Advice from Those Who’ve Been There, Done That (2013):
229.
Mayhaven Healthcare Ltd v Bothma [2009] EWHC 2634 (TCC).