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Material Breaches of Construction Contracts By (1) Non-Payment, (2) Non-Performance, (3) Defective Performance and (4) Wrongfully Terminating the Contractor
Oct 15 2018 On Behalf of David M. Duree & Associates, P.C. Uncategorized
Material breaches of construction contracts and subcontracts occur when (1) a contractor is not paid (2) the contractor walks off the job (3) the contractor’s performance is defective and (4) when a contractor is wrongfully terminated. As a general rule, the first breach of a construction contract relieves the opposing party from further performance of that contract. Who breached first frequently determines the outcome. Decisions to terminate, to not pay, and to walk off the job are major decisions for owners and for contractors. The United States Court of Appeals for the Eighth Circuit recently affirmed a case which applied these principles and awarded a subcontractor $215,578.00, finding that the general contractor had breached the subcontract first by its delays, by wrongfully terminating the subcontractor and by failing to pay the subcontractor. Randy Kinder Excavating, Inc. vs. JA Manning Construction Company, Inc. (Decided August 7, 2018).