Repudiation in construction contracts

Abandonment or refusal to carry out the work without lawful excuse is a repudiation while bad workmanship is unlikely to constitute repudiation, unless the breaches are so serious that the contractor is clearly unwilling or unable to complete the work.

Delay will not amount to a repudiation where time is not 'of the essence' unless it is so serious that it demonstrates that the contractor is unwilling or unable to complete the work, or the effect of the delay is to deprive the employer of substantially the whole benefit of the contract. However, the employer may render time 'of the essence' by serving a notice on the party in breach to that effect. To be effective, such notice should not be given prematurely, and must give a reasonable time for completion. It is likely that service of a notice by the employer to the effect that continued delay will be treated as repudiatory conduct is, in most cases, advisable to prevent a subsequent argument by the contractor that time was not 'of the essence'.

In addition to the service of a notice rendering time 'of the essence', it is possible that the clause in the contract that stipulates the date of completion is, properly construed, a condition. Breach of that clause would therefore entitle the employer to terminate the contract.