Breach of Contract in Construction Cases

A construction contract is an agreement between two parties for a construction project. When one party breaches the contract, the other party can sue for financial damages.

Table of Contents

How Are Damages Computed in Construction Contracts?

Damages are computed in two different ways in construction contracts.:

Cost-To-Complete

This measure requires the losing party to pay damages to replace or complete the project the parties agreed upon when there are defects.

Diminution-In-Value

This measure requires the losing party to pay for the difference in value between the completed project and the specified project.

Are There Other Types of Recoverable Damages?

Yes, for example:

Consequential damages
Liquidated damages
Nominal damages
Specific Performance

Are There any Limitations to My Recovery of Damages?

Yes. here are some of the most popular ones.

Foreseeable Damages

The breaching party must be able to foresee that the damages will likely occur.

Certainty

Damages must be proven with certainty. For example, claiming you suffered emotional distress because your “dream house’” was built wrong is not measurable.

Duty To Mitigate

The party suffering loss has a duty to not make it worse. When a builder is constructing a house when the other party cancels the contract, the builder cannot finish the house and then recover damages for building the entire house. Although the other party is in breach of contract, the builder needs to ensure damages as minimized.

Can an Attorney Help Me?

If you think you are entitled to damages related to a construction contract, a business attorney can ensure you recover everything that you are owed.

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