NYC Breach of Construction Contract Lawyer

Given the high stakes of construction projects in New York City, where space is at a premium and regulatory compliance is essential, the repercussions of a construction contract breach can significantly impact finances and project schedules.

Breaches of contracts range from failure to meet contractual obligations such as timelines and quality standards to more complex issues like disputes over payments or compliance with local construction laws and regulations.

Richman Law Firm PLLC can provide representation to negotiate resolutions or, when necessary, litigate to protect the interests of New Yorkers. Whether you’re a contractor, property owner, or a stakeholder in a construction project, contact our law firm today for a free consultation.

What Is a Breach of Contract?

A breach of contract occurs when one party involved in a construction project fails to fulfill their obligations as outlined in the contract. This can include failing to complete a project on time, not meeting agreed standards, or failing to meet financial obligations as scheduled.

Contracts establish expectations for all parties involved, delineate responsibilities, and provide a roadmap for completing a construction project. When these agreements are not honored, a domino effect can occur that impacts all areas of the project.

Whether you believe there has been a breach of your construction contract or you’re facing a breach of contract allegations, securing legal counsel is a must.

Elements Required for a Breach of Contract Claim

Certain elements must be proven to successfully claim a breach of contract in construction law. These elements form the foundation of a claim and can include:

A Valid and Enforceable Contract

The first step for filing a claim involves proving that a valid, enforceable contract exists. This could be a written agreement outlining each party’s obligations and responsibilities in the construction project. It should include clear terms and conditions, such as the scope of work, payment terms, timelines, and any essential details.

The primary requirement of any breach of contract claim is the existence of a contract recognized as valid and enforceable under New York law. The parties must have entered this contract freely, including mutual consent to its terms.

The Plaintiff’s Performance of the Contract

The plaintiff, or the party making a breach of contract claim, must demonstrate that they have fulfilled their obligations under the contract. This means that they have done what was required of them per the contract terms. For instance, if a contractor claims a contract breach because a property owner has failed to pay, they must show they have completed the agreed-upon work.

It is not uncommon for disputes to arise regarding whether a party’s performance has satisfied contractual requirements. In such cases, it is essential to have a record of conversations, actions taken, and any hurdles encountered while fulfilling contractual duties. These records can be of great help in proving the plaintiff’s case.

Breach of Contract by the Defendant

The plaintiff must prove that the defendant, or the party accused of the breach, failed to fulfill their contractual obligations. This could be anything from not completing work on time, using substandard materials, failing to pay for services rendered, or not adhering to specifications.

It’s important to note that a breach must be significant and not a minor deviation from the contract terms. In some cases, it might be a pattern that amounts to a breach. In others, it might be a significant failure that disrupts the project or causes financial loss.

Specific Damages

Additionally, the plaintiff must demonstrate that they have suffered specific damages due to the breach. These damages could be financial losses, such as the cost of hiring another contractor to complete the work, losses incurred due to project delays, or loss of business opportunities.

It’s crucial to note that not every breach of contract results in damages. For a successful claim, there must be a clear link between the breach and the harm suffered by the plaintiff. This is often one of the most contentious aspects of a breach of contract claim.

Common Construction Breach of Contract Claims

In the world of construction law, breach of contract claims can happen from a multitude of circumstances. Each case is unique, but some common types of construction contract breaches include:

Contractor-Caused Delays

Construction projects are typically time-sensitive, and delays can result in financial loss. If a contractor fails to adhere to the agreed timeline without a valid reason, it may constitute a breach of contract.

Additionally, contractor-caused delays can occur due to poor planning, mismanagement, or unforeseen circumstances that prevent the contractor from completing the project on time. These delays can lead to increased costs and potential legal disputes.

Owner-Caused Delays

Just as contractors can cause delays, so too can property owners. These can occur when an owner fails to provide information, approvals, or access to the property on time.

Owner-caused delays may also result from project scope or design changes after work has begun. While some changes are expected in construction projects, unreasonable changes that impact the project’s completion date may constitute a breach of contract.

Faulty or Incomplete Workmanship

In a construction contract, the contractor must perform the work to a certain standard. If the work is poorly performed, incomplete, or does not follow the agreed specifications, it may constitute a breach of the contract.

Faulty or incomplete workmanship can lead to significant problems later, including structural issues, safety hazards, and additional costs for repairs or rework.

Use of Substandard Materials

A construction contract typically specifies the type and quality of materials to be used in the project. If a contractor uses substandard materials, it can be considered a breach of contract.

Substandard materials can compromise projects’ structural integrity, safety, and long-term value and lead to additional costs for replacement or repair. Proving this type of breach often requires expert evaluation to establish whether the materials used were indeed substandard, as specified in the contract.

Contractor Abandonment

Contractor abandonment occurs when a contractor stops work on a project without proper notice or justification, leaving the project incomplete. Abandonment can lead to delays and additional costs, as the property owner may need to hire another contractor to complete the work.

Abandonment can occur for various reasons, including financial difficulties, subcontractor disputes, or mismanagement. Regardless of the reason, contractor abandonment can constitute a breach of contract.

Change Order Disputes

Change orders are common in construction projects. They are formal amendments to the original contract that adjust the scope of work, materials, price, or timeline. However, disputes can arise when there is disagreement about the necessity, cost, or execution of a change order.

Change order disputes can lead to project delays and increased costs. They may also cause friction between parties, which can escalate into legal disputes. If a party fails to adhere to the change order procedures outlined in the contract, it may constitute a breach of contract.

Failure to Pay

Failure to pay is one of the most common causes of breach of contract claims in construction law. It can occur when a property owner fails to pay the contractor or when a contractor fails to pay subcontractors or suppliers.

Non-payment can disrupt the progress of a construction project and result in liens being placed on the property, further complicating matters. In some cases, non-payment may be due to disputes over work quality or completion, project scope changes, or financial difficulties.

Failure to Perform a Specific Obligation

A construction contract typically outlines responsibilities for each party involved. These can range from providing necessary permits and approvals to ensuring the safety of the construction site to performing specific obligations outlined in the contract.

For instance, if a contractor fails to secure necessary permits or adhere to safety regulations, project delays, fines, or even shutdowns can result. Similarly, if an owner fails to provide timely access to the property or necessary information, the project’s progress can be disrupted.

Subsequent Purchaser Claims

A breach of contract claim may arise after the original property owner has sold the property to a subsequent purchaser. These claims typically involve defects or issues that were not obvious at the time of purchase but have since become evident.

Subsequent purchaser claims can be complex, involving multiple parties and potentially multiple contracts. The subsequent purchaser may have a claim against the original owner, the contractor, or both, depending on the nature of the defect and the terms of the sale.

These claims often require a detailed investigation to determine when and how the defect occurred, who was responsible, and whether there was any misrepresentation or failure to disclose during the sale process.

Minor Breaches vs. Material Breaches

In construction law, not all breaches of contract are equal. The breach’s severity and impact can vary, which is reflected in how the law categorizes breaches.

Minor Breaches

Minor breaches, also known as partial or immaterial breaches, occur when a party fails to fulfill a non-essential contract term or performs a contractual obligation that deviates slightly from the agreed terms. These breaches do not typically disrupt the performance of the contract or cause substantial harm to other parties.

For instance, if a contractor completes a project a few days later than specified in the contract, but all other terms are met, this could be considered a minor breach. While it may warrant compensation for the delay, it would not typically justify terminating the contract.

Material Breaches

Conversely, material breaches occur when a party fails to perform an essential term of the contract, rendering it impossible for the other party to receive the agreed-upon benefit.

If a contractor fails to complete a project entirely or delivers work substantially different from what was agreed upon in terms of quality or specifications, this could be considered a material breach. In such cases, the injured party may be entitled to legally terminate the contract and seek damages.

Determining whether a breach is minor or material can be complex and depends on the circumstances involved. As such, it’s better to consult a construction contract lawyer who can provide guidance based on your unique situation.

Substantial Performance

In construction law, substantial performance is typically considered when a contractor has completed most of the work specified in the contract. Still, minor defects or unfinished aspects may exist that do not materially affect the project’s usability or value.

For instance, if a contractor has built a property per the agreed specifications but has minor cosmetic issues or non-essential features that have not been completed, this could be considered substantial performance. In such cases, the property owner would still be obligated to pay. However, they may be entitled to withhold an amount proportionate to rectifying the defects or completing the unfinished work.

It’s important to note that what constitutes ‘substantial’ can be subjective and often depends on the surrounding circumstances. Determining whether substantial performance has occurred can involve assessing factors such as the extent and nature of any deviations from the contract, their impact on the project’s functionality or value, and whether they were made in good faith.

Possible Breach of Construction Contract Remedies

When a breach of a construction contract occurs, several remedies may be available depending on the nature and extent of the breach. These remedies aim to compensate for losses incurred due to the contract breach and may include the following:

Monetary Damages

Monetary damages are granted in some breach of contract cases to compensate for financial losses incurred due to the breach. These damages can cover costs of repairs or rework needed due to faulty workmanship, additional expenses incurred due to delays, or lost profits due to disruption of business operations.

Several types of monetary damages may be awarded in construction law litigation cases:

• Compensatory damages aim to compensate for direct losses and costs incurred due to the breach.
• Consequential damages cover indirect losses that are foreseeable results of the breach, such as lost profits.
• Liquidated damages are pre-agreed amounts specified in the contract that will be payable in the event of specific breaches.
• Punitive damages are awarded in rare cases where the breach includes reprehensible conduct.

Specific Performance

Specific performance is a legal remedy granted in some breach of contract cases. It involves the court ordering the breaching party to fulfill contractual obligations.

In construction law, specific performance may be ordered when monetary damages are insufficient to compensate for the breach. For instance, if a contractor has unique skills or expertise that cannot easily be replaced, or if the project involves unique or custom work, the court may order the contractor to complete the work as specified in the contract.

Specific performance is typically only considered when the work is unique or cannot easily be replicated by another contractor. Furthermore, courts are often reluctant to enforce specific performance due to practical considerations such as monitoring compliance and the potential for further disputes during performance.

Termination of the Contract

A breach of contract may entitle the non-breaching party to terminate the contract. This remedy is typically available when a material breach substantially affects the fulfillment of the contract.

Termination of a construction contract can halt work on a project and potentially lead to additional costs and delays. The non-breaching party may also be entitled to seek damages for losses incurred due to the breach.

However, termination is not always straightforward. Many construction contracts include clauses that specify termination conditions and procedures. Failure to adhere to these provisions can lead to further disputes and potential legal complications.

Contact Us for a Free Consultation

Dealing with a breach of construction contract in NYC requires a nuanced understanding of the legal landscape and the construction industry. It involves identifying the breach and navigating the intricate process of seeking resolution or compensation.

Whether you are a contractor facing allegations of a breach, a property owner dealing with project delays or substandard work, or a stakeholder caught in a contractual dispute, our team can help. Our construction lawyers offer legal representation, contract review and drafting, dispute resolution, litigation, and more. Contact us today for a free consultation.