Question

If a contractor gives 7 days notice and terminates the contract due to owner's fault, how much money can the contractor recover?

a) 50% of total payment, All expenses
b) 25% of total payment, Damages incurred
c) 100% of total payment, Incidental costs
d) Reasonable overhead and profit, Work completed

Answer 1

The contractor can recover for work completed, reasonable overhead and profit, and incidental costs due to the owner's fault, not a predetermined percentage of the total payment.

Step-by-step explanation:

If a contractor terminates the contract due to the owner's fault after giving a 7 days notice, the amount of money the contractor can recover typically depends on the specific terms of the contract and applicable law. Generally, a contractor may be entitled to recover for work completed, reasonable overhead, and profit that would have been earned on the uncompleted portion of the contract. This compensation aims to put the contractor in the position they would have been in if the contract had been fully performed.

Additional compensable amounts might include any incidental costs that were directly incurred as a result of the owner's breach. It is not standard for a contractor to be entitled to a fixed percentage such as 50% or 100% of the total payment unless specified by the contract terms. Instead, recovery typically includes the value of work done plus additional damages directly related to the breach.