Construction Contract Breach Remedies

Construction Contract Breach Remedies: A Guide for Contractors and Subcontractors

Construction contracts are legally binding agreements that define the scope of a construction project, establish timelines and budgets, and outline the responsibilities of all parties involved. However, as with any contract, breaches can occur, leading to disputes and potentially costly legal proceedings. This article will explore the different types of construction contract breach remedies available to contractors and subcontractors.

What is a breach of contract?

A breach of contract occurs when one party fails to fulfill their obligations under the terms of the contract. For example, if a contractor fails to complete a project on time or within budget, or if they fail to meet specific quality standards, they may be in breach of contract.

Types of construction contract breach remedies

1. Damages

Damages are a common remedy for breach of contract in the construction industry. They are generally awarded to compensate the injured party for any financial losses incurred as a result of the breach. Damages may be awarded for direct losses, such as the cost of repairing defective work or completing unfinished work, or for indirect losses, such as lost profits or other consequential damages.

2. Specific performance

Specific performance is a remedy that requires the breaching party to fulfill their contractual obligations. In the construction industry, this may involve requiring a contractor to complete a specific aspect of the project that was not completed as per the contract. Specific performance can be an attractive remedy for the injured party, as it allows them to get the job done without having to hire another contractor.

3. Termination

Termination is another common remedy for breach of contract. If the breach is significant enough, the injured party may be able to terminate the contract and seek damages for any losses sustained. Termination may also be an option if the other party is unable or unwilling to fulfill their obligations under the contract.

4. Liquidated damages

Liquidated damages are a predetermined amount of money that will be paid in the event of a breach of contract. This type of remedy can be included in the contract and can serve as a deterrent to breaches. Liquidated damages can be calculated on a daily basis or for specific milestones, such as completion dates.

Conclusion

Construction contract breaches can be costly and time-consuming for all parties involved. However, there are several remedies available to contractors and subcontractors, including damages, specific performance, termination, and liquidated damages. It’s important to work with an experienced attorney who can guide you through the process and help you determine the best course of action for your specific situation. By understanding these remedies, you can protect your interests and minimize the potential impact of a breach of contract.