The Contractor’s Shield: Rights and Remedies in EPC Contracts
An EPC (Engineering, Procurement, and Construction) contract isn’t a one-way street. The Contractor also has remedies available in case of breach by the Owner. A well-drafted contract clearly outlines these protections for the Contractor.
Here are some common Contractor’s remedies for breach:
- Suspension/Termination for Cause: The Contractor can suspend work or terminate the contract if the Owner fails to meet their contractual obligations. This might include non-payment, failure to certify progress of completed work, loan default by the Owner, or any other material breach.
- Recovery of Due Sums and Costs: The Contractor has the right to recover any sums owed by the Owner for completed work, as well as costs incurred or committed based on the contract.
- Termination for Owner-Caused Delays: In some cases, the contract may allow the Contractor to terminate the contract if the Owner fails to provide necessary access or rights of way to the project site, or if the Owner causes delays or disruptions to the project.
Importance of Clear Contractual Wording:
It’s crucial to clearly specify these remedies in the contract. This ensures the Contractor’s rights are protected in the event of an Owner-caused breach. An ambiguous contract can lead to disputes and hinder the project’s progress.
Building a Balanced Contract:
A well-balanced EPC contract protects both the Owner and the Contractor. By outlining clear rights and remedies for both parties in case of breach, the contract promotes a collaborative and successful project execution.
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