Guide to Using the RIBA Professional Services Contracts 2018 - Other - Page 66
Contract terms
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The Client is able to suspend or terminate ‘at will’ but the Architect/Consultant can
only do so for reasons specified in the Conditions. However, exercising contractual
rights to suspend or end the Contract can be risky. If not done strictly in accordance
with the conditions or the reasons are not valid and, if it occurs at a critical stage, the
other party might claim the Contract had been repudiated, leaving the affected party
entitled to expensive damages and costs.
What is repudiation?
Repudiation of a Contract occurs where one party renounces their obligations
under the Contract. The principle is based on the concept that the parties should
be ready, willing and able to fulfil their contractual obligations at the relevant time.
Suspension or termination by the Client
The Client has to give a minimum of 7 days’ notice of suspension or termination
of performance of the Services and/or other obligations and just has to state the
reasons for doing so. The Client can effectively suspend or terminate ‘at will’ or ‘for
convenience’ allowing them to terminate without having to establish that some event
has occurred, or breach has been committed, by the other party. This can be useful
where the Client reconsiders the use to which land should be put, cannot secure
financing for the whole of the project or cannot secure tenants. This is an advantage
for the Client as it is rare for contractors and consultants to be given the right to
terminate for convenience.
Suspension or termination by the Architect/Consultant
Unlike the Client, the Architect/Consultant has to state the contractual reasons
why the Contract is being suspended or terminated as well as giving the 7 days’
minimum notice. Before suspension or termination is contemplated, the Architect/
Consultant must consider the possible reaction of the Client, whether the situation
can be remedied in any other way and how any potential loss can be mitigated.
Always seek legal advice.
The Contract states a number of reasons why the Architect/Consultant may be able
to suspend or terminate but the grounds are not necessarily limited to these.
• If the Client fails to pay any fees or other amounts due by the Final Date for
Payment unless a Pay Less Notice has been issued. Late payment of fees in
itself does not justify termination, unless it is a regular practice of the Client
• If the Client constantly infringes its obligations under the Contract
• If the Architect/Consultant cannot continue to perform the Services for reasons
beyond their control
• If the Client wishes to change the Contract to Design and Build and the
Architect/Consultant does not agree to be novated to a Contractor
• Force majeure, i.e. some unforeseeable circumstances that prevent someone
from fulfilling the Contract.
At the same time, the Architect/Consultant may suspend the licence to copy and
use information in the event of late payment of fees. However, while this option will
be useful in the pre-construction stages, its use during the construction period is
unlikely to be upheld by the courts as the costs of delay to the work would be an
unreasonable penalty to the Client. The Architect/Consultant still has the option of
suspending performance of the Services, which may be as effective, but careful
thought is needed based on the advice in the third paragraph above.
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