Contract Termination

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Under Section 90 of the DBCA homeowners may, under certain circumstances, have the right to terminate the contract in the event of blowouts in:
• The cost (if the contract price rises by 15% or more after the contract is entered into because of the operation of a cost escalation clause in the contract); or
• The time frame of the contracted work (if the contracted work is not finished within a period that is 1.5 times the period allowed for in the contract), provided that:
o The reason for the rise in price, or increase in time, could reasonably have been foreseen by you when the contract was entered into; and
o For a rise in price, the rise is not caused by a delay for which the building owner is responsible.

If you are unsure about your client’s right to terminate or withdraw from the contract, you should seek formal legal advice, especially before responding to any legal documentation from the client.