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Contract Disputes: Breach of Contract

Contract disputes can definitely drive both parties crazy. Especially if they are in the middle of a building project. But these disputes can be avoided and doesn’t only require keeping both parties in solid agreement. It also requires scrutiny from a legitimate construction expert.

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What are Contract Disputes?

Contract disputes happen when one fails to comply to contractual terms. This failure is called contract breach. In other instances, both parties may probably just have different interpretations that may result to disagreements. These disputes are legally bound and may escalate into a court proceeding if it does not get settled earlier.

What is Breach of Contract?

Any failure to comply with contractual obligations is called a ‘breach’. Whether the party refused to do the terms in the contract or did not follow at all what was said in the contract, that can be considered a contract breach. Especially if it was breached without any lawful excuse.

Types of Contract Breach

This type of breach occurs when one party tells prior to the due date that he/she will not perform his/her task.

This happens when one party refuses to fulfill his contractual obligation on the actual due date.

This breach occurs if, for example, a party was able to do his/her task but was able to accomplish it beyond the due date. That situation qualifies as a minor breach.

This type of breach happens when one party ends up doing something different from what is expected on his/her contractual terms.

What are the Remedies for Contract Disputes?

Negotiation

This resolution can be the resort of both parties and may not involve the decision of third party to be imposed on the situation. It is also best if both parties are able to come up with a written agreement once they settled their dispute through this act.

Mediation and Arbitration

If negotiation fails, this could be the next step. This time, a third party is involved. An arbitrator can hear the sides of both parties and come up with a resolution. Moreover, mediation arbitration are quicker and cheaper than court proceedings.

Court Proceedings

If no resolution came up during the mediation and arbitration stage or there is still no satisfaction regarding the resolution proposed, a court proceeding is the last resort to for both parties to take. Just like previous resolution, a third party is also involved. A judge will hear both sides of the story and should come up with a decision.

Breach of Contract Remedies

There can be three remedies for contract breach. These are: Damages, Specific Performance, and Cancellation and Restitution.

Payment for damages is the most common remedy for contract breach. But there are also kinds of damages such as:

  • Compensatory damages
  • Punitive damages
  • Nominal damages
  • Liquidated damages

This is considered an alternative remedy for the non-breaching party. This remedy can be done if damages do not suffice non-breaching party’s situation. Hence, cases that qualify for this remedy are also considered rare and unique.

This remedy means that the contract can be cancelled by the non-breaching party and may sue for restitution. This would bring the party back into its situation prior the breach and the cancellation of contract would void all parties involved from contractual obligations.

How to Avoid Contract Disputes

1. Note down all the important things that you agreed with the other party.

Even if you already signed a contract with your contractor or client, it is better that you keep a record of what you agreed on. So that in case there are misinterpretations or disagreements in the future, you may take a second look on the contract as well as your own notes.

2. Make sure that you are both clear with your contractual obligations.

Many contract disputes root from vague descriptions of scope of works. So to avoid that, both parties must clear out each other’s contractual terms and make sure that both are well-informed with their tasks.

3. Consult with a Building Lawyer

Of course, it is best to seek the advice of a legal expert. If you really want to make sure that you don’t miss anything in your contract, consult with a construction lawyer. Construction lawyers offer construction contract services such as drafting and reviewing.

If you are looking for a building lawyer around Sydney that you can easily reach, Contracts Specialist is for you. Our principal lawyer, John Dela Cruz, can give you the best and the right legal advice for your contract problems. With his extensive knowledge and over 10 years of experience in construction law, you can confident that you are in good hands.

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Contracts Specialist is a Sydney-based construction law firm dealing with building disputes, construction contracts, and debt recovery. So if you’re in a situation, call us now!

You can be confident that you are getting the right legal advice.

Contracts Specialist is a Sydney-based construction law firm that deals with Building DisputesConstruction Contracts, Debt Recovery, and Security of Payment. With Contracts Specialist, you are ensured that you are in good hands.

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