Tag: Contract Law

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Washington Court of Appeals Confirms Enforceability of Termination-for-Convenience Clauses and Holds that Implied Covenant of Good Faith Places No Limits on Express Termination-for-Convenience Clauses
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Reform of Construction Contract Law Planned in Germany
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General Contract Law Update

Washington Court of Appeals Confirms Enforceability of Termination-for-Convenience Clauses and Holds that Implied Covenant of Good Faith Places No Limits on Express Termination-for-Convenience Clauses

By D.C. Wolf, Brad Lewis, and Jesse O. Franklin, K&L Gates, Seattle

The contract law concept of a “termination for convenience” allows one contracting party to terminate a contract that has become inconvenient or unnecessary and settle with the terminated party for partial performance.  The doctrine originated during the U.S. Civil War to give the Union government flexibility when quickly changing battlefield conditions rendered a planned project or procurement overly costly or no longer necessary.[1]

In its recent decision in SAK & Associates, Inc. v. Ferguson Construction, Inc., No. 72258-1-1, 2015 WL 4726912 (Wash. Ct. App. Aug. 10, 2015), the Washington Court of Appeals, Division One, given very limited existing authority, clarified that partial performance of a construction project is sufficient consideration to support a termination-for-convenience clause and rejected the argument that the implied covenant of good faith and fair dealing limits a party’s ability to invoke such a clause.

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Reform of Construction Contract Law Planned in Germany

By Christoph Mank, K&L Gates, Berlin

Introduction
Despite the huge economic significance of the construction industry to Germany, there is, as yet, no codified construction contract law. Usually, general services contract law according to the German Civil Code (Bürgerliches Gesetzbuch – BGB) is applied to contract types as varied as manual repair work and project developments involving millions of Euros. Traditionally, general contractual terms known as “VOB/B” (Verdingungsordnung für Bauleistungen), which have existed for almost 100 years, are of considerable practical importance to the German construction industry. They are flanked by increasingly extensive case law regarding individual issues of construction law, requiring expert knowledge to comprehend the legal framework for construction contracts. A codification of construction contract law has been called for in Germany for a long time. The most recent comprehensive reworking of the law of obligations, which came into effect in 2002, also saw a revision of services contract law, but without consideration of the specific characteristics of construction contracts. The pressure exerted by practitioners on the legislature has increased due to recommendations issued by the building commission, “Deutscher Baugerichtstag”, that has been convening biannually since 2006. In September of this year, a draft bill was presented by the Federal Ministry of Justice and Consumer Protection (Bundesministerium der Justiz und für Verbraucherschutz) for the reform of the construction contract law. There will be considerable need for further discussion regarding the details in the consultations currently taking place among interested groups. However, we would like to take this opportunity to give an overview of the planned changes to the law.

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General Contract Law Update

As part of K&L Gates’ commitment to continuing professional development, the lawyers in our London office’s Energy, Infrastructure and Resources group regularly provide presentations and seminars on a wide range of legal issues.

The attached slides are taken from a presentation by Matthew Smith, Inga Hall and Daniel Lopez de Arroyabe on the subject of recent developments in contract law.  The presentation looked at cases on general commercial and contractual issues, as well as focussing more particularly on those relating specifically to construction law matters.

To view the presentation, click here.

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