What constitutes breach of contract?

A company owner has contracted a building company to construct a new warehouse. The owner and general contractor have set a completion date for the project. The owner has an opening date and has made supplier arrangements to deliver product to the new location at a specific time and date. The company owner schedules delivery of office furniture and warehouse equipment by the agreed upon completion date. The problem is the general contractor and the subcontractors have not completed the project on time. There’s been delays, and now there are serious consequences.

When circumstances such as these culminate, Louisiana law allows you to hold contractors, suppliers, owners and subcontractors liable for breaching the terms of the contract. In these cases, a written contract has established the design, construction parameters, goals and deadlines, but these conditions have not been met.

Valid factors for breach of contract

A client or contracting company needs evidence as listed below to make a valid claim against a contractor, subcontractor or another party. All parties consented to the agreement in the contract. All participants had the ability to meet the terms, conditions and deadlines of the contract. In addition, a lawful consideration has been made, or in other words, all parties will receive a reasonable benefit from the agreement. In addition, a cause factor is taken into consideration. This is some event or action during the construction of the building that prevented the contractor or another party from completing the project on time.

Force Majeure

With building projects, sometimes circumstances spin out of control, and the builders, subcontractors and others are not able to complete the agreed upon work on time. A force majeure clause covers unforeseen circumstances. If a hurricane, tornado or other natural disaster hits the building site, the contractor may not be able to complete the building project as originally contracted.

Failure to perform

To establish failure to perform, you need to prove that contractors, subcontractors and other parties involved were full equipped to complete the work as contracted, but they did not perform the work. For example, if a subcontractor allocated and delivered needed building materials in time to complete work, but the contractor and subcontractor did not complete the work on time. This constitutes a failure to perform.

Next steps

Most construction contracts have clauses for settling disputes because it’s expensive for all parties to litigate a case in court. If the above conditions apply to the construction case, then at least one party has breached the contract. After the dispute resolution process has concluded, any party in the contract can file a lawsuit against another party. Often the company contracting the work levies a suit against the contractor, subcontractors or others involved in the construction project. The court may find the contractor and/or subcontractors liable for lost profits, delay damages and other damages to the business.

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