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How can breach of a construction contract lead to litigation?

On Behalf of | Aug 29, 2019 | Construction Contracts |

With California being the most populous state in the country, there are all kinds of construction companies involved in many different projects at any given time. These companies are oftentimes in competition with one another, but there are also many times when they work together on projects. Whether the relationship is between different construction companies, or between construction companies and their contractors, vendors and customers, usually there is a contract underpinning the rights and obligations of the respective parties.

So, when a breach of a construction contract occurs, how can this lead to litigation? After all, most businesses have continued prosperity in mind and prolonged litigation usually isn’t a step in that direction. However, when the breach is a significant one, the relationship between the parties may be permanently fractured. At that point, it may be best to attempt to salvage what can be salvaged from the deal.

Most contracts have clauses that address the remedies for a breach. When it comes to construction contracts, those remedies are often financial recuperation or penalties. The remedies are supposed to be a deterrent for potential breaches, but it doesn’t always work out that way.

If the parties cannot resolve the disagreements or breaches of a contract between themselves, courtroom litigation may be necessary. When that occurs, the courts will resort to the applicable law to resolve the issue. This is when it is beneficial for construction companies to have the right legal information about their own unique contract breach situation. Not every contract breach results in the termination of the contract and an experienced attorney can explain available options to those who need help.