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What happens when a contractor breaches a construction contract?

On Behalf of | Jun 20, 2024 | Civil Litigation

In the realm of construction, contracts serve as the blueprint for expectations and obligations between parties. A breach of contract occurs when one party fails to fulfill their duties as outlined in this agreement. 

Identifying a breach of contract

A breach might be as clear as a contractor not completing a project by the agreed deadline, or as nuanced as the failure to meet the specified quality standards. In construction, both scenarios can cause significant delays and financial strain. 

Potential consequences for the breaching party

Once you establish there has been a contract breach, the non-breaching party has several solutions at their disposal. The solutions could be finishing the project according to the original plan or reducing the payment in accordance with the work completed. Another option is to pay for any losses and extra expenses brought on by the breach.

Legal remedies available

The impacted party may pursue official legal channels if informal discussions fail. These could include asking for monetary damages for the breach or filing a lawsuit for specific performance. Doing so requires the party in violation to fulfill their half of the agreement. However, each case is different based on the conditions of the contract and how serious the breach is.

Taking immediate action is crucial. Documenting all communications and the impact of the breach supports your position in negotiations or during potential legal proceedings. 

Resolving construction contract disputes

Going through a contract breach in the construction sector requires a strategic approach to minimize disruption. The primary aim is always to smooth over disagreements and ensure a return to normal operations while maintaining all parties’ interests.