![]() ![]() However, despite contracting parties’ best intentions and efforts at drafting comprehensive contract provisions, it is inevitable that all possible situations will not be covered in the contract documents. In this case, the owner may be justified in terminating the contract and certainly would be entitled to recover damages because it clearly did not receive the benefit of its bargain.įortunately, most construction contracts and subcontracts outline/define what events of default constitute a material breach that would permit the non-breaching party to cancel the contract and recover breach of contract damages. If the above facts are changed so that the contract provides for the installation of 24-inch brand X ductile iron pipe and the utility contractor instead installs 8-inch brand X ductile iron pipe, the contractor has committed a “material breach” of its contract obligations because the 8-inch water line will not carry/service the same amount of water as the 24-inch pipe specified in the contract. In this example, the utility contractor’s breach is a “non-material breach” of the contract, and the owner’s remedy would be to recover damages (if any) it suffered because it did not receive the full “benefit of its bargain” (i.e., the difference in value between brand X and Y pipe). (Brand X was required in the contract specifications.) Despite the fact that both brand X and Y ductile iron pipe function equally well, the contractor has nevertheless breached its contract by failing to comply with the material specifications of the contract. Here are some real project examples of these definitions in action are-A utility contractor installs brand Y instead of brand X ductile iron pipe. Conversely, a “material breach of contract” is a substantial breach of a significant term or terms of a contract that excuses the non-breaching party from further performance under the contract and gives the non-breaching party the right to recover damages. Legal dictionaries and common law decisions define a “breach of contract” as a violation of one portion of a contract that does not excuse the non-breaching party’s performance but gives the non-breaching party the right to recover damages. ![]() Is a contract "default" the same thing as a "breach" in relation to construction contracts? What is the difference between a "material" breach and a "non-material" breach of a construction contract? ![]()
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