QLD Termination of Purchase Order (Legal Contract) - Compensation?

[Csb89]

Hi. As a subcontractor, I have taken on a larger project for a builder. Throughout the project, I have had very patchy progress claims to the point that I am now three claims in with only approx 40% of the first claim paid thus far. I informed the builder that I will not be undertaking any more work until my claims are paid in full. The builder has requested the I relocate my equipment so he can carry on the job.

The builder has issued a purchase order to me prior to undertaking the project. Where do I stand under commercial law - can they just take the job over or am I eligible for compensation under contract law for terminating the contract midway with no other reason than insufficient cashflow?

Just trying to get a grasp of the situation before I engage a lawyer on this matter.

Any help is greatly appreciated. Thanks.

 

[Rod]

Hard to comment without more detail.

You need to read your/builder's contract to understand your legal rights.

You may well be able to claim the entire contract price if the builder unreasonably terminates the contract, but you need to read your contract.

 

[Sarah J]

Hi Csb89,

Like Rod said, it really depends on your purchase agreement or any other agreements signed between you and the builder. If the builder has breached the purchase agreement by failing to pay you, then this may be construed as "non-performance". This will either entitle you to compensation only or termination of the contract and compensation.

In relation to the request for moving your equipment, again, does it say anything in the contract? Who owns this equipment? If you do, does the builder have a license/lease over the equipment?

What exactly does the purchase order say?

 

[Tim D]

--Disclaimer-- I am just a law student

This isn't advice but a pointer to maybe some helpful information.

As this dispute relates to a building project it might be worth having a look at and seeking advice in relation to - The QLD Act Security of Payment Act 2004 (QLD) I am more across the ACT and NSW systems but basically it is a legislative framework to enable sub-contractors to compel payment from the builders. The powers and rights under the Act are available despite what the contract says, though some contractual terms do have some effect.