Go Your Own Way: Easier Said Than Done on Washington Construction Projects

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Originally published to the Seattle Daily Journal of Commerce on August 11, 2026

I recently stumbled across my teenage daughter’s playlist, boldly labeled “Amazing.” Nervously, I pressed play. To my complete surprise, the speakers blared Fleetwood Mac’s Go Your Own Way, a classic hit about breaking up. Putting aside that the playlist ultimately lived up to its name, the song was surprisingly relevant to my work. That same week, I had just wrapped up a contractor termination dispute in which one party had decided to, well, go its own way.

Construction breakups rarely go well. The smoothest usually involves a mutual separation and descoping of work or services, with the following key terms resolved before the parties separate: payment, insurance coverage, continuing warranties, assignment of subcontracts, title to goods and drawings, and survival of provisions that may be triggered later, such as indemnity.

Other breakup options typically are less palatable. One party may terminate the contract for cause.  The owner also usually may terminate for convenience (sometimes called “T for C”), an option that, despite its name, is rarely convenient. A familiar example of where the latter is needed is a project whose financing falls through, causing the work to be postponed indefinitely.

For an owner, terminating a construction contract may be the second most important decision on a project (the first being the selection of the contractor in the first place). Termination for cause is a powerful contractual remedy when employed properly. If, however, the owner is wrong about how it terminates a contract, or why it terminates, a court or arbitrator may conclude that the owner was the first party to materially breach the contract, and the consequences can be significant.

Consider a project that is badly delayed by the contractor, with future schedules forecasting even more contractor-caused delay. Frustrated, the owner reaches out to another contractor that has successfully completed prior work for the owner and asks about finishing the job. The owner and replacement contractor complete their due diligence. The owner then sends the original contractor the required seven-day notice of intent to terminate by email and, on the seventh day, announces that the termination is effective. The owner looks forward to getting the project back on track.

Not so fast, says the first contractor. It refuses to assign subcontracts to the owner, records a lien for unpaid work and lost profit, and points out that the contract required notice by certified mail, not email. Because email notice was insufficient, the contractor argues, the termination for cause was never properly executed and must be treated as a termination for convenience.

The difference between termination for convenience and termination for cause can be seismic. Depending on the contract language, a contractor terminated for convenience may have no further obligations under the contract, including warranty obligations for already completed work or obligations to assign subcontracts to the owner. The contractor may also claim a termination fee or lost profit and will almost certainly argue that it cannot be back charged for the owner’s additional completion costs. Worse still, even though the contractor was terminated for delay, the contract may preclude the owner from assessing liquidated damages if the termination is deemed one for convenience. In a proper termination for cause, by contrast, the owner can typically back charge the contractor for correcting defective work and for additional costs to complete the remaining work, subject to contractual limitations; take assignment of subcontracts; avoid paying a termination fee; and assess liquidated damages.

In our example, conversion into a “T for C” is bad news for the owner. But it can get worse. What if the relationship with the replacement contractor also goes south? At that point, the optics may suggest that the common denominator owner is the problem, even if the owner is not.

Contractors face significant risk in this area as well. In one case I recall, a contractor terminated an owner for nonpayment because the full certified amount due had not been wired. The contractor did not realize that its accounting department had accepted a joint check covering the balance. The owner responded by terminating the contractor for failing to return to the site in time to complete the job, arguing that the contractor should be paid nothing and was responsible for all delays and additional completion costs. Not a good day for the contractor.

Many termination disputes share common themes: emotion plays too large a role in the decision-making process, and counsel is consulted too late (or not at all). Many terminations I have encountered also occur over, or uncomfortably close to, the holidays, increasing the risk of rushed, emotional decision-making.

Fleetwood Mac’s Go Your Own Way laments a relationship that did not work and recognizes that mutual separation may be best. Both sides can then live to love and fight another day. In construction, this sort of semi-amicable departure may sometimes be the better option than one side making the decision for both parties. As Neil Sedaka would say, breaking up is hard to do.  But coming in like a wrecking ball may not produce the outcome you want.

Colm Nelson is a partner and member of the Construction and Design Group in the Seattle office of Stoel Rives LLP. Contact Colm at colm.nelson@stoel.com for issues related to construction contracts.