Breach of Construction Contract
By Contracts Specialist|July 21, 2022
When you entrust the construction of your dream home to a supposed competent contractor, they betray this trust by manifestly sloppy work and gross delay.
We will help identify what options are available for you to address this situation.
When Your Builder Commits Breach of Contract
Have you experienced these when building or renovating your home?
How Do I Know If There's Been Breach?
Let’s look at what constitutes breach, and the kinds of contracts it affects.
What constitutes breach?
A breach happens when one party violates any of the agreements embodied in the contract, or when one party “repudiates” the contract. What do we mean by “violation” and “repudiation”?
Violation means “going against.” In the example above, the contractor, by his actions, violated the agreements in their contract.
Repudiation means that one party evinces an intention to no longer be bound by the terms of the contract; or that they are unable to perform the obligations under the contract. In short, when one party refuses (or becomes unable) to perform his obligations under the contract, there is repudiation. An example would be abandonment of the project.
Depending on the type and extent of breach, but regardless of the type of contract, if your rights have been breached, you have the following options:
1. Sue for Damages; or
2. Terminate the Contract
A. Damages
You can claim either actual or liquidated damages depending on what was specified in the contract. Just make sure they are applied correctly, so there won’t be any confusion about how much each party may claim from the other.
B. Termination of Contract
Another option is to terminate the contract. The availability of this remedy is dependent on several factors:
a) written into the contract, as in number 4; or
b) even without a written clause allowing a party to terminate, they may still do so on the basis of numbers 1-3.
Let us explain further.
An “essential term” is the backbone of the agreement; without which, there will be no contract.
An “innominate” term is not essential, but the violation of which nevertheless has serious consequences, and is considered to be a serious breach or a repudiation.
Repudiation means a party is no longer willing or able to proceed with the contract, and may also provide for termination in case there has been some kind of material breach.
Which of These is Right for You
So now you know the most common remedies provided by law (Home Building Act 1989 (NSW)). The next question is, which of those options should you take?
Offhand, what we could offer are practical solutions:
First, you may want to reach out to your contractor and talk things out, settle things amicably.
If all else fails, call a specialist construction lawyer. They are trained and experienced in helping you make an informed decision on how to proceed with your matter.
Your Options, Moving Forward
Research is a complicated process and you can do it on your own, or get help from experts who know what they’re doing.
You can call and consult with a lawyer, preferably one who specialises in construction law, who can and will help you make an informed decision; and will draft all the required documents for you, such as a Notice of Breach or a Show Cause Notice, should you opt for termination of contract.
Of course, all details and factual circumstances must be taken into consideration in deciding what the best course of action is for your particular situation. Decisions are made on a case-to-case basis.
Contracts Specialist offers advisory opinion as well as a full range of services relating to the vindication of your rights, whether you choose to pursue an action in, or out, of court.
Don’t let your rights be trampled upon. Call us. Your first consult is free.
We will help identify what options are available for you to address this situation.
When Your Builder Commits Breach of Contract
Have you experienced these when building or renovating your home?
- your contractor used substandard materials
- some materials were different from the ones agreed upon
- some of the works were left half-finished
- constant and unreasonable delays
- the overall quality of work was strikingly inferior
- you received invoices for delayed, incomplete, shoddy work
- you keep reaching out to your contractor via calls, texts, e-mails – to no avail
How Do I Know If There's Been Breach?
Let’s look at what constitutes breach, and the kinds of contracts it affects.
What constitutes breach?
A breach happens when one party violates any of the agreements embodied in the contract, or when one party “repudiates” the contract. What do we mean by “violation” and “repudiation”?
Violation means “going against.” In the example above, the contractor, by his actions, violated the agreements in their contract.
Repudiation means that one party evinces an intention to no longer be bound by the terms of the contract; or that they are unable to perform the obligations under the contract. In short, when one party refuses (or becomes unable) to perform his obligations under the contract, there is repudiation. An example would be abandonment of the project.
Depending on the type and extent of breach, but regardless of the type of contract, if your rights have been breached, you have the following options:
1. Sue for Damages; or
2. Terminate the Contract
A. Damages
You can claim either actual or liquidated damages depending on what was specified in the contract. Just make sure they are applied correctly, so there won’t be any confusion about how much each party may claim from the other.
B. Termination of Contract
Another option is to terminate the contract. The availability of this remedy is dependent on several factors:
- There was a breach of an essential term; or
- There was breach of an innominate term, where the effect of the breach has serious consequences; or
- The erring party repudiated the contract; or
- When the right to terminate is provided in the contract.
a) written into the contract, as in number 4; or
b) even without a written clause allowing a party to terminate, they may still do so on the basis of numbers 1-3.
Let us explain further.
An “essential term” is the backbone of the agreement; without which, there will be no contract.
An “innominate” term is not essential, but the violation of which nevertheless has serious consequences, and is considered to be a serious breach or a repudiation.
Repudiation means a party is no longer willing or able to proceed with the contract, and may also provide for termination in case there has been some kind of material breach.
Which of These is Right for You
So now you know the most common remedies provided by law (Home Building Act 1989 (NSW)). The next question is, which of those options should you take?
Offhand, what we could offer are practical solutions:
First, you may want to reach out to your contractor and talk things out, settle things amicably.
If all else fails, call a specialist construction lawyer. They are trained and experienced in helping you make an informed decision on how to proceed with your matter.
Your Options, Moving Forward
Research is a complicated process and you can do it on your own, or get help from experts who know what they’re doing.
You can call and consult with a lawyer, preferably one who specialises in construction law, who can and will help you make an informed decision; and will draft all the required documents for you, such as a Notice of Breach or a Show Cause Notice, should you opt for termination of contract.
Of course, all details and factual circumstances must be taken into consideration in deciding what the best course of action is for your particular situation. Decisions are made on a case-to-case basis.
Contracts Specialist offers advisory opinion as well as a full range of services relating to the vindication of your rights, whether you choose to pursue an action in, or out, of court.
Don’t let your rights be trampled upon. Call us. Your first consult is free.
