Construction Contract Dispute: Notice Requirements for Termination and Reimbursement

A construction company entered into a contract with a property owner for building work, and after completion, the owner refused payment, citing defects that the company subsequently failed to remedy within the stipulated time frame, leading the owner to have the work completed by a third party and seek reimbursement for the cost. The court of first instance ruled in favor of the owner, finding the non-performance justified the termination and subsequent costs, but the appellate court reversed, holding that the owner's failure to give the initial notice requiring remedy did not strictly comply with contractual provisions, which barred the subsequent recourse to have the work completed by another party at the contractor's expense. The highest court ultimately quashed the appellate decision, reasoning that the contractual clause stipulating the formalities for invoking the right to have the work completed by a third party at the defaulting contractor's expense was not of a mandatory public order nature, and thus the owner's prior failure to strictly adhere to those notice requirements did not preclude the subsequent right to terminate for non-performance and seek reimbursement for necessary corrective measures.