What Constitutes a Breach of Contract in Construction?
When disputes arise on construction projects, they often trace back to a breach of contract. In Florida, construction law defines what obligations contractors, subcontractors, owners, suppliers, and design professionals must follow.
A clear understanding of what amounts to a breach of contract helps us guide our clients through disputes effectively and helps them protect their interests. Miguel A. Brizuela, Esq. will analyze what constitutes a breach of contract in construction, how Florida courts assess breaches, and what legal remedies might apply.
Defining a Breach of Contract in Construction Law
A breach of contract occurs when one party fails to fulfill its obligations under a binding agreement. In construction law, this could involve missed deadlines, substandard work, nonpayment, or a failure to comply with project specifications.
Construction contracts define responsibilities for each party, from project timelines to material requirements and payment schedules. When any party deviates from those agreed terms without legal justification, the law considers it a breach.
The severity of the breach and the available remedies depend on the facts surrounding the violation and how it affects the other party.
Types of Construction Contracts in Florida
Before we break down breaches, it helps to understand the different types of construction contracts we often see in Florida. The nature of the agreement can shape how breaches occur and how courts evaluate them.
Common construction contracts include:
Lump sum contracts: One fixed price for all work performed.
Cost-plus contracts: Payment for actual costs plus a fee or percentage.
Time and materials contracts: Payment based on time spent and materials used.
Unit price contracts: Payment based on specific quantities of work.
The type of contract matters because it influences what each party is responsible for and what might trigger a breach.
Material Breach vs. Minor Breach
Not all breaches of contract carry the same weight. In construction law, courts classify breaches as either material or minor.
A material breach happens when one party’s failure to perform substantially undermines the purpose of the contract. Material breaches can allow the non-breaching party to suspend performance or seek termination of the contract.
A minor breach (sometimes called a partial breach) occurs when a party fails to meet some obligations, but the overall purpose of the contract can still be met. In these cases, the non-breaching party may still have a right to recover damages, but termination may not be an option.
Examples of Breach of Contract in Construction
There are many ways breaches occur in construction law. Some examples include:
Nonpayment for work completed: An owner fails to pay contractors after proper invoicing.
Defective workmanship: A contractor provides work that does not meet agreed specifications or building codes.
Missed deadlines: A contractor fails to complete work within the agreed timeframe, causing delays for other trades or the entire project.
Unauthorized changes to project scope: A contractor or subcontractor performs work outside the agreed scope without proper approval.
Failure to provide required materials: A contractor uses materials that do not meet the contract’s quality standards.
Each of these breaches could support a legal claim, depending on the contract terms and the impact on the project.
How Florida Courts Analyze Breach of Contract Claims
When construction breach claims reach Florida courts, judges analyze several factors to decide whether a breach occurred and how it should be handled. Courts look at the language of the contract first. Clear, detailed contracts make it easier to identify breaches.
Judges also consider:
The nature and purpose of the contract.
The extent to which the breaching party deviated from its obligations.
The extent to which the non-breaching party received the intended benefit of the contract.
Whether the breach was intentional or the result of unforeseen circumstances.
Whether the breaching party made any attempts to correct the violation.
We always recommend documenting project changes, disputes, and communications thoroughly. Clear records help show how the parties understood their obligations and what led to the alleged breach.
Common Defenses Against Breach of Contract Claims
Construction law allows parties accused of breaching a contract to raise defenses that could limit or eliminate liability. Some of the most common defenses we see in Florida construction cases include:
Impossibility or impracticability: A party may argue that unforeseen conditions made it impossible to complete work as required.
Waiver by the non-breaching party: If the non-breaching party knowingly allowed the breaching party to perform differently than required, the breaching party might argue that a waiver occurred.
Prior breach by the other party: In some cases, a party argues that the other side breached first, excusing later performance.
Ambiguity in the contract: When a contract’s terms are unclear, parties may disagree about what they were actually required to do.
These defenses do not apply automatically, and the court’s interpretation of the contract language heavily influences whether they succeed.
Damages and Remedies in Florida Construction Law
When a court finds that a breach of contract occurred, it may award damages to compensate the non-breaching party. In construction law, common remedies include:
Compensatory damages: Money to cover actual losses caused by the breach, such as extra costs to complete the project or repair defective work.
Consequential damages: Money for indirect losses that stem from the breach, such as lost profits caused by delays.
Specific performance: In some cases, a court may order the breaching party to perform certain obligations rather than paying damages.
Parties may also include liquidated damages clauses in their contracts, specifying how much one party owes if certain breaches occur. Florida courts generally enforce liquidated damages clauses as long as they represent a reasonable estimate of potential losses rather than a penalty.
An Intro to Notice and Cure Provisions
Many Florida construction contracts include notice and cure provisions requiring parties to notify each other of alleged breaches and allow time for correction. These clauses serve important functions in construction law by giving parties a chance to fix issues before disputes escalate.
When reviewing breach claims, courts examine whether the non-breaching party gave proper notice and allowed a reasonable opportunity to cure. Failing to follow these steps could limit a party’s ability to recover damages or terminate the contract.
Breach of Contract and Construction Defects
Construction defects frequently overlap with breach of contract claims. When contractors perform defective work, they often violate the quality standards set by the contract.
In Florida, construction defect claims may trigger separate statutory rights under Chapter 558, Florida Statutes, which requires pre-suit notice and an opportunity to resolve claims.
This process adds another layer to breach claims involving defective workmanship, and it highlights the importance of clear documentation throughout the project.
Termination of Contracts Due to Breach
Severe breaches sometimes justify terminating a construction contract entirely. In Florida, termination for cause generally requires:
A material breach that substantially defeats the purpose of the contract.
Proper notice and an opportunity to cure, unless the contract waives this requirement.
Compliance with any contractual termination procedures.
Improper termination can itself amount to a breach of contract, so we always advise reviewing contract language carefully before making that decision.
Importance of Well-Drafted Construction Contracts
Many breach of contract disputes could be avoided with clearer, more detailed contracts. In construction law, strong contracts define each party’s responsibilities, allocate risk fairly, and set procedures for handling changes and disputes.
Well-drafted contracts:
Clarify scope of work and performance standards.
Set clear payment terms and schedules.
Address how to handle changes and delays.
Include dispute resolution procedures, such as mediation or arbitration.
By addressing these issues upfront, construction contracts help reduce uncertainty and minimize the risk of disputes.
Preventing and Managing Breach of Contract Disputes
While we cannot control every factor that affects a construction project, we can take steps to reduce the risk of breaches and disputes. Proactive contract management, clear communication, and thorough documentation help us protect our clients’ interests.
When disputes arise, early legal analysis allows us to assess potential breaches and identify available remedies before conflicts escalate. By addressing potential issues promptly, we can often resolve disputes more efficiently and with less disruption to ongoing work.
Call Today to Get Started
Breach of contract disputes are a reality in Florida’s construction industry, but understanding how construction law defines and evaluates breaches helps us protect our clients’ rights. We serve Miami, Florida, and throughout Southern Florida including Fort Lauderdale, and West Palm Beach. Call Kirwin Norris P.A. today to learn more.