Legal Question in Construction Law in Canada

Re: Job

Do you mean, "What legal procedure should be followed to terminate a contract between the contractor and a subcontractor when the subcontractor is not performing?"

If so, I would suggest the following as guidelines.

(1) Evidence of nonperformance should be gathered and documented.

(2) Demand for performance should be made.

(3) Notice of intention to revoke or rescind the contract should be given;

(4) The express termination-for-cause provisions in the contract (if any, and there should be some) should be found and followed;

(5) The owner and the architect or engineer or other owner representatives should be kept fully informed;

(6) The presence or absence of any default-curing time, arbitration, mediation or grievance-handling procedures should be given weight, as well as the possibilities for replacing that subcontractor (or not);

(7) The subcontractor's defenses and rights should be considered;

(8) The notice requirements to a defaulting subcontractor are complex and often the subject of litigation. If the contract is a large one, an attorney familiar with the contract should be consulted at each step.

(9) You can bring an action for resicission and/or for declaratory relief that the contract has been rescinded. The defaulting subcontractor must be paid or otherwise compensated to the extent it has given any net benefit to the plaintiff general contractor under the rescinded contract.

The most thorny area is proper notice to the sub. Other areas of concern are keeping the owner happy, making sure suppliers and employees of the sub get paid, handling legitimate counterclaims of the defaulting sub with integrity, and handling the turn-over of plans, materials, job site access, etc. to the replacement sub.

If in doubt, retain an attorney to advise on the specifics. Without seeing the contract itself and more information about the circumstances, I can only give you this very general guidance.