The Legal Implications of Terminating a Construction Contract for the Parties Involved and Others.

Abstract

The legal consequences of terminating a construction contract are particularly significant, especially regarding the contract itself and the resulting effects. This is because the contract stands as one of the principal sources of obligations that bind individuals in their transactions with others and serves as an effective means of achieving economic and social interests, provided these interests align with public order and moral standards. However, circumstances may arise where one party fails to fulfill its obligations, leading to the termination of the contract. The core issue addressed in this research centers on the breach committed by one party to the construction contract, particularly the contractor, who bears the primary obligation of executing the construction work. The importance of this study lies in its focus on a contract where the obligation pertains to continuous work, which represents the main commitment within the contract and through which the nature and reality of urban development are determined. This has led administrative bodies to intervene in the details of this work. The study aims to demonstrate that the law grants one or both contracting parties the right to disengage from the contractual bond by considering the nature of the contract entered into and duly ratified by the parties. The research plan comprises two sections: the first discusses the concept of termination, divided into two subsections—the first explaining the meaning and types of termination, and the second outlining the conditions for termination. The second section examines the consequences of contract termination, also divided into two subsections—the first analyzing the impact of terminating a construction contract on the contracting parties, and the second exploring its effect on third parties.