Another typical dispute regarding the construction of a residential home.

Date: November 2022

I recently reviewed another long and detailed trial decision from the Superior Court of Justice about the construction of a residential home gone wrong. These stories usually have the same plot:

  • owner meets contractor to design and/or build a residential home;
  • parties enter into a contract;
  • work begins (honeymoon phase nearly over…);
  • unexpected issues with: work delays, procurement, extra costs etc.;
  • the relationship between the parties sour; and
  • owner stops paying and/or contractor stops working.

The fundamental question we are often asked by clients in these situations (owners, contractors, subcontractors etc.) is whether it was okay for a party to stop working or stop paying. An important question that must be answered is “was there a fundamental breach of the contract?” The answer is almost always factually specific and I’d argue that most of the time there has been no fundamental breach. In any event, at paragraphs 90-97 of the decision, the court outlines some important legal principles to consider when trying to figure out if a fundamental breach of contract has occurred.Click here for a link to the decision.

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