Building a new home or renovating an office space is a major project. You hire contractors, sign agreements, and expect the work to be completed as promised. But what happens when things go completely off track? If a contractor fails to deliver on the core promises of your agreement, you might be facing a material breach.
Dealing with contract issues can be stressful. Fortunately, understanding your rights and the specific terms of your agreement makes the process much easier to navigate. This guide will walk you through what a material breach looks like in the construction world and how to handle it effectively, even if you need to get a contract lawyer involved.
What Is a Material Breach?
In contract law, a material breach occurs when one party completely fails to fulfill their primary obligations outlined in the agreement. It is a failure so significant that it defeats the entire purpose of the contract.
When a material breach happens, the non-breaching party is typically excused from performing their end of the deal, such as making final payments, and can seek legal remedies.
Common Examples of a Material Breach in Construction
Here are some typical situations where a material breach might arise on a construction project:
1. Delivering the Wrong Structure
- For example, if you hire a builder to construct a brick home but they build it entirely out of wood, the final product is fundamentally different from what was agreed upon.
2. Abandonment of the Project
- If a contractor pours the foundation for a new addition and then completely walks off the job without returning, this is considered a material breach.
3. Failure to Pay Subcontractors
- If a contractor fails to pay subcontractors, resulting in liens being placed on your property, this can also qualify as a severe contract violation.
How Courts Determine Whether a Breach Is Material
If a dispute goes to court, a judge will look at several factors to decide if a material breach actually occurred. They will evaluate how much of the contract was actually completed. If the contractor finished 95% of the work, the court might not view the remaining 5% as a material issue.
Courts also look at the financial impact on the innocent party. Did the mistake cost you a significant amount of money to fix? Furthermore, they will consider if the breach was intentional or just an honest mistake, and whether money can adequately compensate for the damages caused by the material breach.
Minor Breach vs Material Breach
It is important to understand the difference between a material breach and a minor one. As noted in this guide on the four types of breach of contract, a minor breach happens when someone fails to complete a small part of their obligation.
For instance, if your kitchen remodel was supposed to be finished on Tuesday, but the crew wraps up on Thursday without causing you any serious financial harm, that is a minor breach. You still got the kitchen you paid for, just a little late. A material breach, on the other hand, would be if they never installed the cabinets or appliances at all.
What to Do if You Suspect a Material Breach
If you believe your contractor has committed a material breach, the first step is to thoroughly review your contract. Look for any clauses detailing dispute resolution or termination. Next, document everything. Take clear photos of the incomplete or incorrect work, save all emails, and keep records of any payments made.
Before stopping your own payments or firing the contractor, it is always best to consult with a qualified contract attorney. They can help you determine if a material breach actually occurred and advise you on the safest legal steps to protect your property and your wallet.
Protecting Your Construction Investment
Construction projects rarely go perfectly, but you deserve to get what you paid for. By knowing the signs of a material breach, you can protect yourself from poor workmanship and unfulfilled promises. Always keep open lines of communication with your builders, and never hesitate to seek professional legal advice if a project goes fundamentally wrong.
If you believe you have a material breach on your hands, our team can help! Schedule a consultation with The Mellor Law Firm and decide how to move forward.