1.30 By 2004, the Department was certain that Laser would not be able to complete the buildings to the required specification and therefore termination was ultimately the best way forward. However, the Department had to avoid a counter-claim that it had wrongly terminated the contract, which would have potentially exposed the Department to compensating Laser for its costs and loss of profit. Legal counsel advised the Department not to progress termination until Laser committed a breach that contractually entitled the Department to terminate the contract and that Laser could not remedy.
1.31 When Laser proposed a negotiated termination, the Department accepted that it should try to conclude a deal. The Department considered that to have proceeded with termination because of Laser's defaults would have risked a legal dispute, the outcome of which would have been uncertain and could have taken many years to conclude. When, in December 2004, the Independent Certifier's completion certificates for the Construction Phases 4 and 7 were overturned, the Department's legal advisers suggested that such a breach could have occurred giving the Department a clear right to terminate the contract, because Laser could not afford to remedy the defective modules. However, by this time, the key terms for the negotiated termination had been agreed, and the only practical effect of the decision was to strengthen the Department's bargaining position should issues be reopened.