The new law regulates the employer’s withdrawal from a construction contract before completion and compensation for the contractor’s expenditure, completed work and lost profit. The court may reduce compensation in accordance with the applicable rules, including savings or gains resulting from the stoppage.
Prepare progress records, certified work, payments, variations, material costs and subcontract commitments. Separate unavoidable expenditure from costs saved when work stopped and avoid counting the same loss twice.
Withdrawal before completion must be distinguished from termination for the contractor’s breach. The reason for ending the contract affects the legal analysis and the claims to be assessed.
Federal Decree-Law No. 25 of 2025 entered into force on 1 June 2026. Check the dates, applicable special legislation and temporal rules for the particular case.
Official sources
Civil Transactions Law | Official explanation of the reforms
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