Construction contracts are an agreement between a Contractor and Subcontractor with expectations on how a project will be completed. This includes timing, materials, layouts, and working conditions. Unfortunately, construction projects don’t always go as planned, which can often lead to a “breach of contract” lawsuit between the Contractor and Subcontractor.
Types of Breaches
Under Maryland law, there are three main ways a breach of contract can happen:
One party failed to perform a task they were expected to do.
This may be regarding using materials not up to the standards of the contract, failing to meet completion deadlines, or not following the predetermined plan for the project. The failure of a single party in a construction project can affect the entire plan.
One party made it impossible for the other to perform.
This can refer to working conditions or legal conditions. If contractors were unable to do their job because they feared for their safety or the employer had failed to get the necessary permits, the contractors can file a suit for breach of contract.
One party refused to perform.
A common example of “refusal to perform” is if an employer refuses to pay for work. Another example might just be a contractor refusing to complete a project.
Filing a Suit
A breach of contract can mean losses for both the contractor and the employer, which means claims can be made for damages. If a contractor puts time and materials into building a house, they are losing money if they don’t get paid. If an employer needs a business ready to open by the end of the month and the contractor fails to mean their deadline, the employer is losing money on a business that should be open. In the State of Maryland, the statute of limitations on a breach of contract lawsuit is three years, with a few exceptions, and any suit under $5,000 will be categorized as “small claims” and held in district court.
How to Avoid a Breach of Contract Suit
The best way to avoid a breach of contract is to ensure your contract has been properly reviewed by a construction contract attorney before you sign it. Here at Hershon Legal, we offer a flat rate for construction contract reviews. We will make sure that you are fully able to comply with all your responsibilities listed and that your business partner is legitimate in their dealings.
If you have just signed your contract but are worried that is has some parts you don’t understand, don’t worry. Maryland has a three day cooling-off period, meaning you have until midnight on the third day after you signed the contract to pull out of the deal. For home improvement contracts, that increases to five days. Feel free to ask for a new contract and schedule a consultation with us. We are proud to help you avoid falling into a breach of contract lawsuit!
