Rethinking of Contract Termination under Article 46 of the General Conditions of Contract (Publication No. 4311)

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Borzoei Abbas; Parchami Jalal Majid

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Journal Paper

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Journal: JUDGMENT Year:2024 | Volume:24 | Issue:2 (118) Page(s): 106-128

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Information Journal Paper

Title

Rethinking of Contract Termination under Article 46 of the General Conditions of Contract (Publication No. 4311)

Author(s)

Borzoei Abbas | Parchami Jalal Majid | Issue Writer Certificate

Keywords

General Conditions of Contract

Terminati

article 46

Employer

Contractor

Abstract

Article 46 of the General Conditions of Contract (GCC), as specified in Publication No. 4311, outlines 15 grounds for contract termination by the employer. Although some of these instances may inherently lead to automatic termination or nullification, where the employer has no role or influence, the majority of termination cases arise due to the contractor’s breach or negligence. This termination right can be interpreted as a breach of a conditional obligation by the contractor. For breaches mentioned in Clause (a) of Article 46, particularly in items 3 through 6, the employer has the discretion to terminate the contract. In making this decision, the employer must weigh public interests and benefits and choose between contract termination, adherence to the contract, or seeking damages. Moreover, if the contractor expresses readiness to mitigate delays—for instance, by working at night as provided in Article 25 of the GCC—and if, according to the employer’s assessment, the contractor’s adherence to the contract would offset or lessen the damages caused by the breaches, and the resulting harm from termination would exceed the harm of contract continuation, or if the employer takes other measures against the contractor, such as compelling contract performance and claiming damages, thereby reducing harm significantly below that of termination, then, considering the analogous principle of Article 25, the exceptional nature of termination, public interest, and preference to minimize greater harm over lesser harm, the employer’s right to terminate is nullified and forfeited.

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