The Construction Contract Termination Letter is a critical legal instrument used in Indonesian construction projects when one party needs to formally end a construction contract. This document is essential when dealing with serious breaches, force majeure events, or mutual agreement to terminate. It must comply with Indonesian legal requirements, particularly the Civil Code (KUHPerdata) and Law No. 2 of 2017 on Construction Services, while addressing practical aspects such as site handover, material custody, and financial settlements. The letter should clearly state the termination grounds, reference relevant contract clauses, and outline the next steps for all parties. It often triggers significant commercial and legal consequences, making it crucial for the document to be properly drafted and executed in accordance with both the contract terms and Indonesian law.
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1. Letter Header and Date: Formal business letter header including sender's details, recipient's details, and date
2. Reference Line: Reference to the relevant construction contract including contract number, project name, and date of original agreement
3. Subject Line: Clear indication that this is a contract termination notice
4. Contract Identification: Specific details of the construction contract being terminated, including project location and scope
5. Termination Statement: Clear and unambiguous statement of termination, including effective date
6. Legal Basis: Reference to relevant contract clauses and/or legal provisions justifying the termination
7. Reason for Termination: Clear explanation of the grounds for termination with specific examples or incidents
8. Immediate Actions Required: List of immediate actions required from the recipient, including site handover procedures
9. Final Account Statement: Summary of financial position including outstanding payments or claims
10. Closing and Signature: Formal closing, signature block, and company stamp
1. Breach Details: Detailed description of contract breaches - include when termination is due to contractor default
2. Cure Period Reference: Reference to previous cure notices and expired cure periods - include when termination follows a cure period
3. Dispute Resolution: Reference to dispute resolution procedures - include when disputes are ongoing or anticipated
4. Insurance and Bonds: Instructions regarding insurance policies and performance bonds - include when these need to be maintained or canceled
5. Confidentiality Reminder: Reminder of continuing confidentiality obligations - include for sensitive projects
6. Intellectual Property: Instructions regarding IP rights and transfer - include when IP is a significant concern
1. Schedule of Outstanding Works: Detailed list of incomplete works and their status at termination
2. Financial Statement: Detailed breakdown of all financial matters including payments, claims, and retentions
3. Asset Inventory: List of materials, equipment, and documents to be handed over
4. Previous Notices: Copies of relevant previous notices, particularly cure notices or warning letters
5. Photographic Evidence: Documentation of site conditions at termination (if relevant to termination grounds)
Relevant legal definitions
Clauses
Relevant Industries
Construction
Infrastructure
Real Estate Development
Industrial Development
Commercial Property
Residential Development
Mining
Oil and Gas
Public Infrastructure
Transportation
Healthcare Facilities
Education Facilities
Hospitality
Retail Development
Manufacturing
Relevant Teams
Legal
Operations
Project Management
Commercial
Construction
Contract Administration
Risk Management
Finance
Procurement
Executive Leadership
Site Operations
Quality Assurance
Relevant Roles
Project Director
Construction Manager
Legal Counsel
Contract Manager
Project Manager
Chief Executive Officer
Managing Director
Operations Director
Site Manager
Commercial Manager
Risk Manager
Procurement Manager
Chief Financial Officer
Legal Director
Company Secretary
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