Much of the law in the area of contract disputes comes from construction contracts. As anyone who has ever been involved in construction knows, there is a good reason for this, as any number of things can go wrong when two parties sign a construction contract. There can be missed payments, poor construction, late construction, unfinished projects or negligent performance, to name a few of the problem areas.
In this post, we mention some of the damage types that are available for parties aggrieved in a construction contract.
- Cost-to-complete damages – These damages are available when one side stops working, and the other is forced to turn to another company to finish construction. The aggrieved side may be able to recoup the money that it had to pay someone else to finish what the breaching side failed to do.
- Consequential damages – These damages are consequences of the contract breach. For example, if one side’s breach leads to an extraordinary delay in completion of the contract, the other side could lose millions of dollars in business. A court could find the breaching side liable for these consequential damages.
- Liquidated damages – Contracts may contain a liquidated damages clause that specify an exact amount of money that one side is due in the event that the other side fails to meet part of its obligations. Courts look at these carefully to ensure that they are reasonable. Two sides can, for example, include a liquidated damages clause that awards damages to the aggrieved side in the event of the other side’s failure to complete a project on time.
- Diminution in value – This may be available when one side performs, but below a particular standard, perhaps using inferior materials. These damages can be difficult to prove if contract language is vague, so it is always best to specify quality or brand in a contract if it is important to the project’s completion.
Have you been involved in a breach of contract dispute over a construction project? What damages did you seek?
Klein Trial Lawyers – Los Angeles business litigation lawyers