Many individuals may encounter a contract dispute during their lives, such as those involving contracts for builders, which is why it is important to understand the legal impact of a breach of contract. A couple in Louisiana is suing a construction company for mishandling construction loan funds during the building of the couple’s home. According to the lawsuit, the couple had a contract with the major construction company to build their home. The cost of the new residential home under the contract was $463,500. The financing for the home was to be paid to the construction company by the bank in a series of installments.
The contract between the parties was signed by the head contractor for the construction company and was recorded; in addition, the couple asserts they performed all the duties required of them under the contract. The bank that was financing the home purchase reported a series of contract breaches by the construction company to the homeowners. The breaches included a failure to properly pay employees in a timely fashion and using the loan installments for purposes other than construction of the couple’s home. The bank reported additional contract breaches to the homeowners, including the construction company’s failure to carry sufficient insurance.
The homeowners terminated the contract with the construction company. There may be a variety of different options and responses available to the non-breaching party to a contract when the party has suffered harm following a contract breach. The options and responses available depend on the circumstances, the nature of the breach and the goals and expectations of the non-breaching party. Remedies may include monetary damages or enforcement of the contract.
Understanding what to do when a contract has been breached is important. Because contracts often govern important business relationships, as well as many other important aspects of our lives, it is important to know how to effectively negotiate a contract and respond to any breach that may arise when there has been a violation of contract terms.
Source: The Louisiana Record, “Couple files breach of contract claim against contractor over mishandled loans,” Max Schramel, Dec. 30, 2014