Nobody goes into a project expecting to fire their GC. But sometimes the relationship becomes untenable — chronic non-payment, impossible demands, hostile work environment, or a GC who's clearly headed for failure.
When you reach that point, how do you get out without losing what you're owed and exposing yourself to liability?
I've helped dozens of subcontractors navigate these difficult exits. Here's what you need to know.
When Termination Is Justified
Before we talk about how to terminate, let's be clear about when it's justified. Terminating without proper grounds can expose you to breach of contract claims.
Clearly Justified Grounds
**Non-payment:** If the GC hasn't paid you according to contract terms, this is usually grounds for termination after proper notice.
**Fundamental breach:** The GC has violated essential contract terms in ways that make continued performance impossible.
**Unsafe conditions:** OSHA violations or conditions that put your workers at risk.
**Fraud or misrepresentation:** The GC lied about material facts affecting your work.
**Suspension of work:** The GC has stopped work with no clear plan to resume.
Potentially Justified Grounds
**Chronic delays not your fault:** If GC delays are destroying your ability to perform profitably.
**Hostile work environment:** If the GC or their staff are abusive or creating impossible conditions.
**GC financial distress:** Signs the GC may not be able to pay (this is tricky — more on this below).
NOT Justified Grounds
**You got a better job:** Abandoning a contract for more profitable work is breach.
**Personality conflicts:** Not liking the GC isn't grounds for termination.
**Normal construction difficulties:** Typical project challenges don't justify walking off.
Read Your Contract First
Before taking any action, read your subcontract carefully. Look for:
Termination Provisions
What grounds does the contract specify for termination? What notice is required? What are the procedures?
Cure Periods
If the GC has breached, do you need to give them time to cure before terminating?
Dispute Resolution
Are you required to mediate or arbitrate before terminating?
Payment Provisions
What happens to payments for completed work if you terminate?
Waiver Clauses
Have you waived any termination rights through previous actions?
Many subcontracts heavily favor the GC. Understand what you signed before acting.
The Termination Process
Assuming you have valid grounds, here's how to execute a termination properly:
Step 1: Document the Breach
Before you do anything, document the specific contract breaches that justify termination. Gather:
Step 2: Send a Cure Notice
Most contracts require you to notify the GC of the breach and give them an opportunity to cure before terminating. Send written notice specifying:
Send via certified mail and email. Keep copies.
Step 3: Wait the Cure Period
Don't be impatient. If the contract specifies 14 days to cure, wait 14 days. Terminating early, even by one day, can undermine your position.
Step 4: Issue the Termination Notice
If the breach isn't cured, issue formal written termination notice. State:
Again, certified mail and email.
Step 5: Stop Work
On the effective date, stop work. Don't continue providing labor or materials.
Step 6: Secure Your Rights
Immediately upon termination:
What Happens to Your Payment
This is the hard part. When you terminate, getting paid becomes more difficult.
Work Completed Before Termination
You're generally entitled to payment for work completed prior to termination, regardless of who terminated. The question is collecting it.
Materials On Site
If you have unbilled materials on the project, document them. You may be able to remove them, or you may need to claim them in your lien or lawsuit.
Retainage
Retainage held by the GC becomes harder to collect when relationships deteriorate. You may need to pursue it through lien or legal action.
Lost Profits
If the GC's breach caused your termination, you may be entitled to lost profits on work not yet performed. This often requires litigation.
Protecting Your Lien Rights
Your mechanics lien may be your most important remedy. Don't lose it by missing deadlines.
Confirm Your Preliminary Notice
Did you send proper preliminary notice to the owner? If not, you may have limited lien rights.
Track Your Lien Deadline
Every state has a deadline for filing liens (typically 60-90 days from last furnishing labor/materials). Know yours.
File Before the Deadline
If there's any doubt about payment, file your lien. You can always release it later if paid.
Serve Required Notices
Many states require you to serve the owner when you file a lien. Don't skip this step.
Dealing with the GC's Response
Be prepared for pushback:
Threats of Counterclaims
The GC may threaten to sue you for breach. If your termination was proper, these threats often don't materialize.
Attempts to Backcharge
They may manufacture backcharges to offset what they owe you. Document everything to defend against these.
Badmouthing
They may try to damage your reputation. Stay professional and factual in all your communications.
Refusal to Release Property
If your materials or equipment are on site, they may refuse access. You may need legal help to retrieve them.
Special Situation: GC Appears Insolvent
If the GC seems headed for bankruptcy, your strategy changes:
Act Fast
Once bankruptcy is filed, an automatic stay prevents you from collecting. Get your lien filed immediately.
Notify the Owner
The owner needs to know that payments to the GC may not be reaching subs. This may trigger owner's protective measures.
Consider the Bond
If there's a payment bond, prepare your bond claim. Surety bonds survive GC bankruptcy.
Preserve Evidence
Document everything about amounts owed and work completed before records become inaccessible.
After Termination: Next Steps
Once you've terminated:
Invoice for Completed Work
Send a final invoice for all completed, unbilled work.
Pursue Collection
If payment isn't forthcoming, pursue your remedies: lien foreclosure, bond claims, litigation.
Review for Lessons Learned
What warning signs did you miss? How can you avoid this situation next time?
Move On
Don't let one bad project poison your business. There's plenty of good work with good GCs out there.
Using SubPaid to Protect Yourself
SubPaid helps you monitor payment patterns throughout a project. If a GC's payment behavior deteriorates, you see warning signs early — while you still have options.
Better yet, SubPaid tracks lien deadlines automatically, so even in a crisis termination situation, you don't miss critical filing dates.
Frequently Asked Questions
Can I terminate without grounds?
Technically yes, but you'll likely be liable for the GC's increased costs and may face a breach of contract claim.
What if I have equipment on site after termination?
You have the right to retrieve your equipment. If the GC prevents access, document it and seek legal help.
Can I work directly for the owner after terminating with the GC?
Be very careful. This could be seen as tortious interference. Get legal advice first.
What if the GC terminates me wrongfully?
If you believe the termination was wrongful, preserve your evidence and consult an attorney about your remedies.
Should I tell other subs what happened?
Be careful about defamation. Stick to factual statements and avoid speculation about the GC's conduct.