Claiming compensation for termination of contract?
Is it possible to claim compensation from the main contractor for termination of contract for reasons beyond our control? The main contractor engaged us for some MEP works in a project and due to mismanagement, the main contractor company suff ered a huge loss and they could not complete the project on time. The client terminated the contract. We have completed 50% of our work within the agreed time. Now due to this termination, we are suff ering loss and the employees did not have work. In such a case, can we ask for compensation? Please advise under which provision can we claim such damages?
1 Answer
Article 707 of the Civil Code recognises an employer’s entitlement to terminate a contract for convenience at any time, provided that he compensates the contractor for the expenses he has incurred, the works he has performed and completed and for the profit the contractor would have gained if he had completed the work. The law permits the court to assess or otherwise adjust the compensation due to the non-terminating party. If the compensation due is disputed by the contractual parties the court will determine the compensation due. by gulf times.
