A breach of contract during a construction project can lead to costly delays and disputes. Understanding how to respond can help minimize damage and get the project back on track.
There are a few steps you can take to help resolve the issue effectively. Know the options and methods available to you so your business can quickly resume operations as normal.
Review the contract terms
The first step when facing a breach of contract is to review the terms of the agreement. A construction contract typically outlines the rights and responsibilities of each party. There should also be details regarding payment schedules and the scope of work. Identifying the violated terms will provide a foundation for addressing the breach.
Communicate the breach
It is important to clearly communicate with the party responsible. A calm explanation of how the other party violated the contract can open the door for a solution. It may be possible to resolve the issue through negotiation, preventing the need for formal dispute resolution. Effective communication early in the process can lead to a more cooperative outcome.
Explore dispute resolution options
If negotiation does not resolve the breach, it may be necessary to pursue formal dispute resolution. Construction contracts often outline methods like arbitration or mediation as alternatives to litigation. These processes can provide a faster and less expensive way to resolve the dispute.
When litigation is necessary
In some cases, litigation may be the only option for resolving a breach of contract. This process involves taking the matter to court, where a judge will determine liability and decide the appropriate remedy. Litigation can be more time-consuming and expensive than alternative methods, so it is often considered a last resort. However, when negotiations or other resolution methods fail, pursuing litigation can ensure enforcement of the contract terms and recovery of any outstanding damages.
Handling a breach of contract during a construction project requires careful action. You have every right to hold the violating party accountable for the breach, but it is also important to choose the path that causes the least damage to your construction operations in the long run.
