Problem: Client put project on hold but has not sent instruction to return to job
I am a director of a company that has been trading for about 10 years as a main contractor. In that time it has grown tremendously, with the bulk of the contract values between £1 million and £10 million.
Back in 2018, a specialist plastering sub-contractor that we have used on refurb work went into liquidation, and the management of the sub-contractor approached us to see if we were receptive to taking them on board and let them operate a specialist plastering division. The idea was good, especially as they already had many contacts and leads, and it was not too long before they started to be awarded contracts.
One of the contracts awarded was for the refurbishment of a country house. The programme was progressive, starting in the east wing on the top floor and working along and then down.
Part way through, the project was put on hold by the client due to finance problems. Some months later, no instruction has been received to return to the job. Although it was agreed to initially suspend operations for a few weeks, the plastering division of the company was banking on this work and they have now had to lay off about half of the work force. Can we do anything about this?
Response: Contract terms and conditions should be consulted
You will need to refer to your terms and conditions of contract. Standard forms of contract may allow performance of your operations to be suspended, but usually there is a time limit for any suspension, and you should be entitled to damages arising from the suspension.
If the suspension exceeds the permitted time limit under the contract, termination can then be an option.
However, such a matter does require expert legal advice and I therefore strongly recommend that you instruct a lawyer.
© Michael Gerard 2019
The advice provided is intended to be of a general guide only and should not be viewed as providing a definitive legal analysis.