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With the construction industry in the grip of labour and supply shortages and spiralling costs, a recent decision of the Queensland court is a timely reminder of the established principles of contractual repudiation. The decision is a warning to parties to think twice before terminating a building contract or indicating an intention not to continue.

In Addinos Pty Ltd v OJ Pippin Homes Pty Ltd [2022] QDC 205, the Queensland District Court (the Court) found that a builder’s decision to terminate a building contract because it was unable to meet escalating industry costs was not a lawful basis for termination. It found the builder liable for repudiation and ordered it to pay nearly $160,000 to the developer in loss and damage, nearly $35,000 in interest and costs to boot.