As a homeowner or small business owner, you feel good when you’ve finished negotiating a contract and your deal is in writing. You may have some lingering concern that you could have negotiated a better deal. You might wish it wasn’t going to cost so much. But ultimately, you had a project you needed done and now you’ve got a contract. You’re on your way.
In an ideal world, everything would go as planned. In the real world, contractors are sometimes late. Sometimes they don’t follow the plan. Sometimes their work is defective. Sometimes they don’t show up at all. Any of these can be a breach of contract.
Let’s say you have a contract for a new room. The job got done on time and with no expensive changes needed, and you were happy with the result. Six months later, though, there is water intrusion around several of the windows and you’re worried about mold.
You have another contractor come to take a look, and they say the windows were not installed properly. Based on a look at your plans, the second contractor tells you there has been a clear breach of the contract. Unfortunately, it will cost a substantial amount of money to have the second contractor fix the problem. What do you do now?
You have a legal responsibility to minimize the damage and to give the original contractor a reasonable opportunity to resolve the problem. If they won’t agree to resolve it after informal attempts to resolve it, however, you may have to file a breach of contract lawsuit.
Does a breach of contract lawsuit force the contractor to fix the problem to your satisfaction?
It depends. There are several types of remedies courts can issue in a breach of contract suit, and the court will typically choose the one that seems most reasonable. Your lawyer will make arguments for why your preferred remedy is the right one.
If the problem had been merely aesthetic, you might only get nominal damages, not a rework. For example, if the contractor used the wrong color of tile, you might be unhappy but the work is just as valuable. You didn’t suffer any economic damages, so you might not get any damages, or just a token payment.
With a problem like leaky windows, however, the breach clearly harmed you. The work needs to be re-done. Let’s assume you can prove the defect exists, that the first contractor was responsible, and that the defect is a breach of the contract.
The main two contract remedies in such a situation are compensatory damages and specific performance.
Compensatory damages are meant to pay you back for whatever the breach of contract cost you. In this case, it would probably be the cost of having the windows reinstalled correctly, plus the expense of fixing any damage caused by the water intrusion. If you chose to have another contractor fix the issue at a reasonable rate, it would be common for the cost of that repair used to calculate your compensation.
The contractor does deserve payment for any work that was not defective, so you probably won’t get back the entire amount you paid (unless the water damage was extensive). Instead, the court will compensate you for what you actually lost.
Specific performance can be ordered when there is some reason compensatory damages won’t be fair to you. The court can order the breaching party to perform the contract. This might be appropriate if, for example, the first contractor had been the only company available, or if their services were unique in some way.
There are a number of other contract remedies that could apply, depending on the situation. For example, if the contractor never showed up, you might get the contract canceled altogether. In rare cases, something so reprehensible may have occurred that you could seek punitive damages, which are meant to punish the breaching party.
If you have experienced a breach of contract by a building contractor or another company, discuss your situation with an attorney. A lawyer experienced in construction defect law or contract disputes should be able to provide options while protecting your right to an appropriate remedy.