From Suspension to Termination: How the GCC 2025 Reshapes Contractor Remedies

Introduction

The publication of the General Conditions of Contract for Construction Works Fourth Edition 2025 represents a deliberate recalibration of contractor remedies when compared with the Third Edition of 2015. While many of the structural elements of the GCC remain familiar, the changes to Clauses dealing with suspension, omissions and termination materially affect how contractors protect cash flow and manage employer default. For contractors, these amendments are not academic. They go directly to the question of how long one must endure non-payment or prolonged inactivity before decisive contractual remedies become available. This article focuses on the evolution of Clause 5.11.2 through Clause 5.11.6 and the consequential interaction with Clauses 6.3 and 9.3, viewed specifically from a contractor’s operational and commercial perspective.

Suspension as a Primary Contractor Remedy

Under the 2015 edition, suspension of the Works was available to the contractor as a remedy for certain employer defaults, most notably failure to make payment in accordance with certified amounts. In practice, however, the suspension mechanism often felt blunt and slow. The timeframes were long and the link between suspension and ultimate termination lacked commercial urgency. The 2025 edition changes this dynamic. The drafting now presents suspension not as a static holding position but as the first step in a structured escalation process that leads, within defined periods, either to resumption of the Works, omission of part of the scope, or termination for repudiation.

Clause 5.11.2 in the 2025 edition retains the contractor’s right to suspend the carrying out of the Works where the employer fails to comply with payment obligations, but the language has been refined to reduce ambiguity. The emphasis is no longer on abstract notions of progress but on the contractor’s entitlement to cease carrying out the Works in response to a defined contractual breach. For contractors, this distinction is important. Disputes under the 2015 edition frequently became mired in arguments about whether progress was in fact being impeded. The newer formulation shifts the focus back to entitlement rather than measurement.

Reduced Timeframes and Increased Pressure

The most significant practical change in Clauses 5.11.2 to 5.11.6 is the reduction of time periods. Under the 2015 edition, a contractor could suspend for a period of 84 days before non-payment could be treated as repudiation. This often resulted in extended suspensions that were commercially damaging while still falling short of termination rights. In the 2025 edition, the period of continued non-payment after suspension has been substantially reduced to 28 days. Once a valid suspension notice has been issued and the employer remains in default, the contractor reaches the point where repudiation may be alleged far sooner than before.

This shortening of the escalation period enhances contractor leverage but also imposes discipline. The notice requirements become critical because the contractor reaches the termination threshold more quickly. A defective suspension notice or a failure to comply strictly with the Clause may deprive the contractor of the right to rely on repudiation later. Contractors must therefore ensure that suspension notices are carefully prepared, correctly addressed and clearly grounded in the contractual provisions. The increased speed of the remedy magnifies the consequences of procedural error.

Contractor Obligations During Suspension

Another important refinement in the 2025 edition is the clearer articulation of the contractor’s obligations during suspension. While contractors sometimes view suspension as a near withdrawal from site, the revised Clause 5.11.4 emphasizes that responsibility for the care of the Works and for materials and plant intended for incorporation remains with the contractor during suspension. This clarification removes any doubt that suspension is not abandonment.

From a practical standpoint, contractors must plan for the cost and logistics of protecting the Works during suspension. Security, weather protection, insurance continuity and record keeping all remain live obligations. These costs should be anticipated when suspension is contemplated, particularly where the contractor expects the suspension to evolve into a longer term remedy such as omission or termination. The clarity in the 2025 edition reduces dispute risk but increases the need for careful management.

Long Stop Suspension and the Right to Elect

Clause 5.11.6 is where the suspension regime in the 2025 edition clearly diverges from the earlier contract. Where a suspension continues for a period of more than 84 days, the contractor is entitled to deliver a written notice to the employer’s agent to requesting permission to proceed. The period within which that permission must be given has been reduced in the 2025 edition to 14 days opposed to the 28 days provided in the 2015 edition. If permission is not granted within the prescribed time, the contractor is entitled to make an election to treat the suspension, where it only affects a part of the Works, as an omission of such part under Clause 6.3 or where it affects the entirety of the Works, as a repudiation of the Contract by the Employer, whereby Clause 9.3 will then be applicable.

This mechanism is of particular importance to contractors because it forces a decision. Under the 2015 edition, prolonged suspension often resulted in a state of commercial limbo. In the 2025 edition, the contract itself drives the parties toward resolution. Either the Works resume, part of the scope is treated as omitted, or the employer’s conduct is treated as repudiation. Contractors should treat this election as a strategic decision point rather than a mere procedural step. It is at this stage that the interaction with Clauses 6.3 and 9.3 becomes decisive.

Clause 6.3 and the Treatment of Omitted Work

Clause 6.3 governs variations and omissions and has always been commercially significant. Its importance is amplified in the 2025 edition by the express linkage between prolonged partial suspension and omission. Where only part of the Works is affected and the employer fails to authorize resumption, the contractor may elect to treat that part as omitted under Clause 6.3.

For contractors, this creates a powerful but nuanced remedy. Treating suspended work as omitted allows the contractor to crystallize its position without terminating the entire contract. This may be particularly attractive on projects where other sections remain viable and profitable. It also reduces the risk of allegations that the contractor has abandoned the Works, because the omission flows directly from the contractual mechanism.

However, omission is not a neutral outcome. Contractors must consider the valuation consequences, the impact on preliminaries and overhead recovery, and the effect on programme and resources. The election to treat work as omitted should therefore be informed by a clear commercial analysis rather than taken reflexively. The 2025 edition makes the option clearer but does not remove the need for careful judgment.

Variations, Instructions and Administrative Discipline

The broader context of Clause 6.3 is also relevant. The 2025 edition reflects an ongoing attempt to reduce ambiguity around instructions and variation orders. For contractors, this aligns with the suspension regime by reinforcing the need for prompt and clear contractual administration. Informal arrangements or prolonged slowdowns that resemble suspension but are never formalised expose contractors to risk. The clearer structure of the 2025 edition rewards contractors who act decisively and penalizes those who allow uncertainty to persist.

In practice, contractors should ensure that any employer driven change that affects the carrying out of the Works is addressed either through the variation mechanism or, where appropriate, through the suspension provisions. Allowing a partial suspension to drift without formal recognition undermines the contractor’s ability to rely on Clause 5.11.6 and Clause 6.3 later.

Clause 9.3 and Termination for Repudiation

Clause 9.3 governs termination by the contractor and is the final step in the escalation ladder that begins with suspension. The shortened timeframes in the 2025 edition mean that termination for repudiation may arise far sooner than under the 2015 edition. Nonpayment following a valid suspension can now reach the point of repudiation in a matter of weeks rather than months.

This strengthens contractor rights but also heightens termination risk. Termination is a high stakes remedy and the 2025 edition reinforces the principle that a party in material breach cannot rely on termination. Contractors contemplating termination under Clause 9.3 must therefore be confident that their own contractual obligations are substantially in order. Programme submissions, insurances, securities and compliance with instructions all become potential points of attack by an employer seeking to resist termination.

The 2025 edition also places increased emphasis on dispute resolution outcomes, particularly adjudication. Failure to comply with adjudication decisions is expressly recognised as a serious contractual failure with termination implications. Contractors should therefore integrate adjudication compliance into their termination strategy rather than treating it as a separate procedural track.

Strategic Implications for Contractors

Taken together, the changes to Clauses 5.11.2 through 5.11.6, 6.3 and 9.3 signal a shift toward faster and more decisive remedies. The contract no longer tolerates prolonged inactivity or unresolved default. For contractors, this is an opportunity to improve cash flow protection and reduce exposure to drawn out disputes. It is also a warning that the margin for error has narrowed.

Contractors who succeed under the 2025 edition will be those who invest in contract management capability. Notices must be accurate and timely. Records must be complete. Decisions about suspension, omission and termination must be made deliberately and supported by commercial analysis. The contract now provides clearer tools, but it expects them to be used properly.

Conclusion

The Fourth Edition of the GCC reshapes the contractor remedy landscape by tightening the suspension regime and linking it directly to omission and termination outcomes. Clauses 5.11.2 to 5.11.6 create a structured escalation path that is faster and more commercially focused than under the 2015 Third Edition. Clause 6.3 provides a viable route for dealing with prolonged partial suspension through omission, while Clause 9.3 strengthens termination rights where employer default persists. For contractors, the message is clear. The 2025 edition offers stronger remedies, but only to those who administer the contract with precision and confidence.

By Roelf Nel (Managing Director) and Daniel Pillay (Associate Designate)