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ARTICLE · 12 APRIL 2022

Dealing With Ipso-Facto Clauses And Step In Rights In Construction Insolvencies

Vincent Young
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The construction industry is currently experiencing a high number of insolvencies

AustraliaInsolvency/Bankruptcy/Re-Structuring
David Greenberg
David Greenberg

What you need to know

  • The construction industry is currently experiencing a high number of insolvencies.
  • Various moratoria arise on a builder entering into external administration which can impact upon the rights that can be exercised by developers, sub-contractors and suppliers.
  • Amongst other restrictions, this includes prohibitions on counterparties taking advantage of ipso facto clauses to terminate building and supply contracts.
  • Step in rights provide a major exception to the ipso facto rules. If implemented correctly, a step in right can be used to take control of a project and to obtain leverage in a construction industry insolvency.

Insolvencies in the Construction Industry

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