Construction Period Termination Clause Samples
The Construction Period Termination clause defines the conditions under which a contract related to a construction project can be ended during the construction phase. Typically, this clause outlines specific events or breaches—such as significant delays, failure to meet milestones, or insolvency—that would allow one or both parties to terminate the agreement before the project is completed. By clearly stating the grounds and procedures for early termination, this clause helps manage risk and provides a structured exit strategy if the construction process encounters serious issues.
Construction Period Termination. Subject to Section 18.3, upon a Construction Period Termination, the Province shall pay to the Contractor a Termination Payment equal to the Capital Amount less:
(a) such portion of the Provincial Funding as the Contractor has received through Progress Payments;
(b) the reasonable cost to the Province, established by competitive bidding process (and including out-of-pocket costs incurred by the Province in relation to that process), of completing the Project, where the competitive bidding process is premised on:
(i) a design-build or conventional contract with progress payments and standard industry warranty;
(ii) use of as much of the Contractor’s Designs as is practicable; and
(iii) a duty on the part of the Province to mitigate the cost of completing the Project and thereby minimize the amount deductible under this clause (b); and
(c) liquidated damages of $40 million to compensate the Province for loss of its bargain.
Construction Period Termination. Subject to Section 18.3, upon a Construction Period Termination, the Province shall pay to the Contractor a Termination Payment equal to the Capital Amount less:
(a) such portion of the Provincial Funding as the Contractor has received through Progress Payments;
(b) any Adjusted School Capital Payments that the Contractor has received multiplied by a factor of 1.25;
(c) the reasonable cost to the Province, established by competitive bidding process (and including out-of-pocket costs incurred by the Province in relation to that process), of completing the Project, where the competitive bidding process is premised on:
(i) a design-build or conventional contract with progress payments and standard industry warranty;
(ii) use of as much of the Contractor’s Designs as is practicable; and
(iii) a duty on the part of the Province to mitigate the cost of completing the Project and thereby minimize the amount deductible under this clause (c); and
(d) liquidated damages of $10 million to compensate the Province for loss of its bargain.
Construction Period Termination. Subject to Section 18.3, upon a Construction Period Termination, the Province shall pay to the Contractor a Termination Payment equal to the net present value of the aggregate Capital Payments, calculated as of the date of the Construction Period Termination and using as a discount rate the Contractor’s Weighted Average Cost of Capital, but not in any event exceeding the total amount of Project Financing anticipated by the Contractor’s Proposal; plus the amount of the Provincial Funding, less:
(a) such portion of the Provincial Funding as the Contractor has received through Progress Payments;
(b) the reasonable cost to the Province (as determined by the Province acting reasonably) to complete the Project and to carry out the Existing Facilities O&M premised on a duty on the part of the Province to mitigate the cost of completing the Project and carrying out the Existing Facilities O&M and thereby minimizing the amount deductible under this clause (b); and
(c) liquidated damages of $4 million to compensate the Province for loss of its bargain.