Look to the Declaration of Independence for the spirit of contract enforcement, risk allocation and the ultimate right to walk away from a toxic project amongst The(se) United States. 

The Declaration sounds much like a modern construction dispute and the ultimate declaration of default and termination notice.

The Prime Contract: Consent and Governing Authorities

A construction contract is an agreement on governance of relationships among the project participants. A contract must have a "meeting of the minds"—mutual consent to a specific set of rules, roles and compensation. (See, Mommie Dearest, R&B, March 1, 2023.) 

The Declaration affirmed this same principle: “Governments . . . derive their just powers from the consent of the governed.”

The contractor consents to the owner’s authority to direct the work, order changes and inspect quality. In return, the owner consents to pay. When one party begins acting unilaterally by, for example, ignoring the agreed-upon mechanisms for change orders or withholding payment without cause, those unilateral acts are breaches of mutual consent created by the contract.

Unilateral acts trigger preservation efforts: notices, constructive changes, claims and dispute resolution procedures. 

Notices of Claims: Documentation of the Breach

Modern construction contracts rely heavily on strict notice provisions. Changes, delays and claims typically require particularized written notices within specified time periods and with detailed content. (See, Another Notice Story, R&B, May 22, 2024.) 

The longest section of the Declaration of Independence is, fundamentally, a detailed Notice of Claim. The signers didn’t just quit or walk away. They submitted an itemized list of 27 specific breaches committed by the Owner (King George III). For example:

·      “He has refused his Assent to Laws…” (Failure to abide by the agreed-upon regulatory framework).

·      “He has dissolved Representative Houses repeatedly…” (Arbitrary termination of project meetings and coordination).

·      “He has plundered our seas, ravaged our Coasts…” (Unlawful interference with the supply chain and site conditions).

Just like owners withholding payments or contractors asserting claims, the Signers understood that allegations without documentation are useless. They presented the facts to prove that the breaches were material, systemic, and ongoing.

The Right to Cure Before Termination

The Declaration of Independence was not an initial remedy, as evidenced by this passage therefrom, “Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn, that mankind are more disposed to suffer, while evils are sufferable, that to right themselves by abolishing the forms to which they are accustomed.” 

In other words, try to fix any problems before turning away from them.

Before a contractor can rightfully terminate a contract for cause, they must demonstrate that they acted in good faith and gave the breaching party ample opportunity to fix the issue. In modern litigation, courts look favorably on the party that tried to de-escalate.

Translated to modern construction terms: The owner sent repeated notices to cure, or the contractor submitted formal (and well-supported) change requests. The parties tried executive-level negotiation. They exhausted every administrative remedy, but to no avail. Usually, only after such efforts, is termination a legally viable option.

When a breach is so severe that it destroys the very purpose of the contract, the non-breaching party has the right to declare a material breach and terminate the agreement. Thus, when the Founders declared that the colonies "are, and of Right ought to be Free and Independent States; that they are Absolved from all Allegiance to the British Crown," they were exercising the 18th-century equivalent of walking off the job, packing up the tools and filing a mechanic's lien against the British Empire.

Remember, the balance of risk, the necessity of documentation, and the rules of engagement are not arbitrary legalese designed to slow you down. A project succeeds when all parties respect the "consent" of the contract (i.e., “the consent of the governed”). 

Jon Straw is a partner with Kraftson Caudle, PLC, a law firm in McLean, Va., specializing in heavy-highway and transportation construction. Straw can be contacted via email at [email protected].