Conam Alaska, a subcontractor on a North Slope project, sued Bell Lavalin for breach of contract and professional negligence. The court ruled that Conam's failure to perform was excused because Bell Lavalin breached its duty to grant a time extension. While the jury awarded contract damages to Conam, the court rejected the professional negligence claim due to insufficient proof of causation. The key lesson: a prime contractor cannot terminate a subcontractor for nonperformance if the prime itself caused the delay through breach.
Document all requests for time extensions in writing. If the prime denies or ignores your extension request, you have a defense against termination for delay.
Contract damages are easier to prove than professional negligence damages. Focus on quantifying direct losses (labor, equipment, overhead) rather than pursuing negligence claims.
A 'total breach' is required to justify termination. Partial breaches or isolated failures do not give the prime the right to terminate your subcontract.