Steps You Can Take When a Construction Contract Is Breached

In the construction industry, every project depends on clear agreements, reliable performance, and trust between parties. Yet even with the most carefully drafted contract, disputes can and will arise, and sometimes one party fails to uphold their end of the deal. A breach of a construction contract occurs when one party fails to fulfill their obligations under the agreement, whether by missing deadlines, delivering substandard work, or failing to pay as promised.

The impact of such a breach can be significant: project delays, cost overruns, strained business relationships, and potential litigation. Understanding your legal rights and the practical steps you can take after a breach is crucial to minimizing losses and protecting your interests.

Types of Construction Contract Breaches

Not all breaches are equal – the severity of the violation and other factors determine your available remedies. Common types include:

Material Breach

A material breach occurs when one party’s failure to perform goes to the heart of the contract, making it impossible for the other party to receive the agreed-upon benefit. This type of breach often justifies termination of the contract and pursuit of damages.

Minor (Partial) Breach

A minor breach happens when one party fails to meet a small or less critical aspect of the contract, but the overall project can continue. The non-breaching party may still seek compensation for losses caused by the breach. Possible examples include slight delays in completing certain work or delivering materials.

Anticipatory Breach

An anticipatory breach arises when one party clearly indicates, whether through words or actions, that they do not intend to fulfill their contractual obligations. This allows the non-breaching party to take action before the breach actually occurs.

Common Causes of Breaches

Breaches of construction contracts can stem from a variety of factors, including:

• Failure to Perform: A contractor or subcontractor doesn’t complete work on time or as specified.
• Financial Problems: A party’s inability to pay for materials, labor, or services can halt progress.
• Contractual Misunderstandings: Ambiguities or differing interpretations of contract terms lead to disputes.
• Scope Changes or Poor Planning: Unclear project scope, inadequate planning, or scope creep can cause missed deadlines or incomplete work.
• Quality or Compliance Issues: Work that doesn’t meet contractual standards or fails inspection may trigger breach claims.

Immediate Steps to Take After a Breach

Acting quickly and strategically can make a significant difference in protecting your rights.

Document the Breach

Gather all relevant evidence: emails, invoices, photographs, inspection reports, change orders, and project logs. Thorough documentation will strengthen your position in any dispute or negotiation.

Review the Contract

Carefully review your agreement for dispute resolution provisions, notice requirements, termination clauses, and any limits on damages. Understanding your contractual rights helps guide your next steps and ensures compliance with procedural obligations.

Notify the Breaching Party

Provide written notice to the party who breached the contract. Clearly outline the nature of the breach, reference the relevant contract terms, and request a specific remedy or corrective action. This step is often required before taking legal action.

Legal Remedies Following a Construction Contract Breach

If informal resolution efforts fail, several legal remedies may be available, depending on the circumstances:

Damages

You may be entitled to monetary compensation for direct losses, consequential damages, or costs incurred due to delays and defects.

Specific Performance

In cases where monetary damages aren’t sufficient, a court may require the breaching party to fulfill their contractual obligations. This remedy is rare in construction disputes, but can be more common if the sale of real property is involved.

Termination and Restitution

You may have the right to terminate the contract and recover payments or property transferred under the agreement.

Litigation or Legal Action

When breaches are severe or negotiations fail, filing a lawsuit may be necessary to enforce your rights. A lawyer experienced in construction law can help assess whether litigation is the best path forward and represent your interests in court.

Alternative Dispute Resolution Options

Before heading to court, many construction disputes can be resolved through alternative methods that save time and expense:

• Negotiation: Informal discussions between parties can often resolve misunderstandings or identify practical solutions.
• Mediation: A neutral mediator helps both sides reach a voluntary settlement.
• Arbitration: A private, binding process where an arbitrator hears the case and issues a decision. Arbitration can be faster and more flexible than litigation, but can also limit your ability to obtain information via discovery or appeal an adverse decision.

In many cases, the construction contract itself will provide a dispute resolution procedure which may include some or all of the foregoing steps. In those cases, failing to use the outlined procedures can itself be a breach of the contract.

How a Good Lawyer Can Help

An experienced construction law attorney can make all the difference in resolving a breach efficiently and protecting your business. A lawyer can:

• Provide expert legal advice based on state and federal construction law.
• Review and interpret contracts to clarify your rights and obligations.
• Negotiate settlements or represent you in mediation or arbitration.
• Prepare and file lawsuits when legal action becomes necessary.
• Mitigate risk by helping you strengthen future contracts to prevent similar issues.

Why Choose Smith Debnam Law for Breach of Contract Issues

At Smith Debnam, our attorneys bring decades of experience representing owners, contractors, and developers in complex construction and contract disputes. We understand the technical, financial, and legal challenges that come with project delivery — and we’re committed to achieving practical, cost-effective solutions that align with your business goals.

Our firm offers:

• Proven experience in construction litigation and arbitration.
• Strategic counsel for contract drafting, negotiation, and enforcement.
• A client-centered approach, ensuring you stay informed and supported every step of the way.

If you’re facing a breach of contract issue in your construction project, don’t wait until the damage worsens.

Contact Smith Debnam today to speak with a construction law attorney who can help you understand your options and protect your investment.