The right to terminate a construction contract due to breach of performance obligations is a fundamental contractual principle. However, it is essential that where applicable, those exercising their right to terminate do so in a way that strictly accords with the  requirements of the contract such as a default notice. In the case of Westbourne Grammar School v Gemcan Constructions Pty Ltd [2017] VSC 645 it was found that the default notice issued by the school was invalid as it failed to provide precise details in reference to the time period given to the other party to show cause. The default notice simply stated “you must show cause by the expiration of 7 clear days after this notice is received by you”. The Court ruled that the notice was invalid as it failed to specify the precise date for compliance, instead providing an ambiguous time frame on receipt of the notice. This case illustrates the importance of sufficient and precise identification of time for the response of a party to a notice. Ensuring that your default notices are valid could be the difference between a valid and invalid termination, and could potentially save you from a wrongful termination suit.

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