CAREERTIPS: When can a Construction Professional suspend the contract works?

Construction Professionals must pay careful attention to the suspension clauses contained in the various forms of a construction contracts in order to understand when you can suspend the works and what notice must be given.

FIDIC, Conditions of Contract for Construction

(Second Ed. 2017)

Clause 16.1

The Contractor can suspend the works if:

• the Engineer fails to certify according to the contractual requirements;

• the Employer fails to provide reasonable evidence of its financial obligations;

• the Employer does not make payment according to the contractual requirements; or

• the Employer fails to comply with a binding agreement, determination or a decision of the DAAB.

The failure by the Employer or Engineer must be a material breach of their obligations under the agreement.

The Contractor must first give a notice to the Employer in which he requests the Employer to remedy the breach within 21 days of the notice. If the Employer does not do so within the 21-day period, the Contractor can suspend the works until the Employer has remedied the default.

JBCC , Principal Building Agreement

(Edition 6.2) May 2018

Clause 28.1

The Contractor can suspend the works where the Employer or Principal Agent has failed to:

• provide and/or maintain a guarantee for payment;

• issue a payment certificate by the due date;

• make payment in full of an amount certified in an interim payment certificate by the due date;

• provide and/or maintain insurance; or

• appoint another agent or where an agent has failed to act in terms of delegated authority.

The Contractor must give 10 working days’ notice to the Employer and the Principal Agent of the intention to suspend the works. If the Employer does not remedy the default within the 10-working day period, the Contractor can suspend the execution of the works until the Employer has remedied the default.

GCC

(Third Edition 2015)

Clause 5.11

The Contractor can suspend the works where the Employer or the Employer’s Agent has failed to:

• deliver a payment certificate; or

• make full payment of the amount certified in the payment certificate.

The Contractor must give written notice (with specific reference to this Clause) to the Employer, with a copy to the Employer’s Agent. The Contractor may suspend the progress of the works after 14 calendar days of the date on which the notice was given.

NOTE: If a Contractor suspends the works without a contractual right, it will likely be regarded as an act of repudiation. 

Also read:4 types of guarantees every Construction Professional should be familiar with