To Terminate Or Not To Terminate: That Is The Question

Recently, an Ontario judge, in Atos IT Solutions v. Sapient Canada, was asked to consider whether a termination of a subcontract was valid. The stakes were high as the subcontractor, Siemens, who had been hired to replace a complex software system, claimed damages for wrongful termination of contract in an amount exceeding 6 million dollars. The key facts in the case were as follows:

1. The subcontract was signed on June 4, 2007;
2. Throughout the duration of the project, numerous issues were raised by the general, Sapient, with Siemens' work, including issues relating to lack of manpower, poor workmanship and delay.
3. In April 2009 the owner and Sapient began to renegotiate a portion of the prime contract that covered Siemens' work scope.