Breach of Construction Contract

What Is a Construction Contract?

A construction contract is an agreement between the parties to a construction project for materials and or services. Some examples of who this type of agreement could be between are a general contractor and a subcontractor,  a general or subcontractor and a consumer/client, or a general or subcontractor and a materialman.

What Are the Elements for a Breach of Contract?

In order to successfully sue for a breach of contract, three elements must exist: (1) a valid contract, (2) a material breach, and (3) damages. Havens v. Coast Fla., P.A., 117 So.3d 1179 (Fla. Dist. Ct. App. 2013) (citing Rollins, Inc. v. Butland, 951 So. 2d 860, 876 (Fla. 2d DCA 2006)). Most of the conflicts arise for the material breach. However, if applicable, a quick and effective way of dismissing the suit is to argue on the other elements, such as the claimant does not have a valid construction contract, and/or valid damages.

What Makes a Construction Contract Valid?

A valid construction contract must consist of certain components such as:

• Offer – one party made an offer to the other party.
• Acceptance – The party who received the offer accepted the offer.
• Consideration – It is required that both parties give consideration or provide something of value to the agreement. For example, a painter paints a house, giving a newly painted house to the client, and the client gives monetary compensation to the painter in return.

In general, written contracts are preferred, as having the terms of a contract in writing brings clarity, but a contract can also be formed orally under the right circumstances.

What Happens When Someone Breaches a Construction Contract?

• A breach of a construction contract is a violation of the agreement, which occurs because of one or both parties’ failure to fulfill their contractual obligations.
• Violations vary from contract to contract but the most common are defective work, unmet expectations, and failure to pay.
• “To establish a material breach, the party alleged to have breached the contract must have failed to perform a duty that goes to the essence of the contract and is of such significance that it relieved the injured party from further performance of its contractual duties.” Burlington & Rockenbach, P.A. v. Law Offices of E. Clay Parker, 160 So. 3d 955, 960 (Fla. Dist. Ct. App. 2015)

What Are the Damages for Breach of Contract?

For breaching a construction contract, the damages would consist of nominal damages, to hold the breaching party accountable, punitive damages, and generally, which include lost revenue from delayed availability of completed facilities, extended contract inspection and administrative costs, and diminished value of completed facility due to late completion. So, if the claimant can prove just one of those types of damages, then they will succeed in meeting the damages requirement.

How to Prevent a Breach of Contract

No one can prevent a breach of a contract from occurring, but there are proactive steps one can take to reduce the chance of a breach of construction contract, which include:

• Confirming with the contractor or client exactly what is expected on both sides of the contract, so there is no interpretation issue;
• Conducting research on the other party to determine if they have a good reputation; and
• Having an attorney review and/or draft the contract.

How to Resolve a Breach of Construction Contract

There are many options in resolving a construction contract, including preliminary negotiations, arbitration, mediation, and litigation. Preliminary negotiation is the cheapest and often most efficient method of resolving a dispute over breach of contract. Arbitration is like litigation but is extremely quicker, but the parties might not be completely fulfilled. Mediation involves a mediator who tries to help both parties come to a consensus that works for everyone. Lastly, litigation is the most time consuming method, but is also the most satisfactory when you are on the winning side.

In Florida, the attorneys of RAK Law Firm are reputable lawyers who are extremely familiar with construction codes and permits. Our attorneys will fight for your rights, as well as offering a myriad of other legal services. If you have any questions or concerns arising from a construction code and permits, please do not hesitate to contact us at (407)-437-0319.