This chapter addresses claims arising out of termination of a contractor or its abandonment of a project, where a replacement contractor is hired to complete the work. Major disputes are likely to follow that may lead to arbitration. Termination claims, however, are difficult and expensive to prosecute and should be undertaken only after careful evaluation for cost justification.
Terminations often are preceded by a multiplicity of disputes that lead to a breakdown in the working relationship between owner and contractor. These triggering disputes must be resolved in addition to the claims that emerge from the termination itself. Delay is often associated with terminations and may further complicate the dispute.
To ensure submission of sufficient information in proper form to reach a proper award efficiently, neutrals must implement an effective hearing management plan. Allowing the parties to proceed in an unguided or undisciplined fashion is likely to result in long drawn out hearings and imprecise awards. The key to effective management lies in focusing upon damage assessments using custom tailored damages accounting forms. Separate, pre-termination disputes may be managed with damages accounting forms discussed in parallel chapters.