The Subcontractor Termination Letter is a critical document used when a main contractor needs to formally end a subcontractor's engagement on a project in the United Arab Emirates. It is typically employed when there are significant performance issues, breach of contract, or other valid grounds for termination under UAE law. The document must carefully balance legal requirements under UAE Federal Law No. 5 of 1985 (Civil Code) and commercial practicalities, including proper notice periods and specific termination procedures outlined in the original subcontract. This letter should clearly state the grounds for termination, effective date, handover requirements, and final account arrangements. It serves as both a legal notice and a practical guide for managing the transition, protecting the main contractor's interests while ensuring compliance with UAE legal requirements regarding contract termination.
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1. Letter Header: Company letterhead, date, reference number, and proper addressing to the subcontractor including their full legal name and address
2. Contract Reference: Clear identification of the relevant subcontract including contract number, date, and project details
3. Termination Statement: Clear and unambiguous statement of termination, citing the relevant contractual clause or legal basis for termination
4. Effective Date: Specific date when the termination becomes effective, including any notice period requirements
5. Grounds for Termination: Detailed explanation of the reasons for termination, with reference to specific contract breaches or circumstances if applicable
6. Outstanding Obligations: List of any remaining obligations, pending works, or deliverables that need to be addressed
7. Handover Requirements: Specific instructions regarding the handover of work, materials, documentation, and site access passes
8. Final Account: Statement regarding final payment calculations, including any deductions or claims
9. Closing Statement: Formal closing including any requirements for acknowledgment and contact details for further communication
1. Dispute Resolution Reference: Include when there are ongoing disputes or likelihood of disputes, referencing the applicable dispute resolution mechanisms
2. Confidentiality Reminder: Include when there are specific confidentiality obligations that survive termination
3. Employee Transfer Provisions: Include when there are arrangements needed for the transfer or management of subcontractor's employees
4. Insurance Requirements: Include when specific insurance obligations continue post-termination
5. Warranty Obligations: Include when there are continuing warranty obligations for completed works
1. Schedule A - Outstanding Works List: Detailed list of incomplete works and status at termination
2. Schedule B - Payment Summary: Breakdown of final account including pending payments, retentions, and claims
3. Schedule C - Required Handover Documents: List of all documents, certificates, and warranties to be handed over
4. Schedule D - Asset Register: List of materials, equipment, or other assets to be returned or transferred
5. Appendix 1 - Relevant Contract Clauses: Copy of relevant termination clauses from the original contract
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