Anthony E. Battelle
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.1 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.
In termination claims, typically each party attempts to show that the
other was to blame for the termination. The issue frequently is
characterized by conflicting interpretations of underlying facts. Neutrals
Anthony E. Battelle is an attorney at Construction Law Services in Boston, Massachusetts. He has lectured extensively on ADR in the construction industry and has produced several papers on the topic.