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Determining damages in construction contract disputes

With construction contracts, it is important to establish expectations at the outset with regard to completion deadlines, construction costs, and measures to prevent overruns. Indeed, incorporating as much detail into the contract could help in resolving small issues before they become major problems.

However, when a party breaches a contract and resolution is not easily found, litigation may be only option. Nevertheless, construction companies (and the entities who hire them) must make sound business decisions when it comes to litigating a contract dispute. Essentially, decisions must be made as to whether a lawsuit makes good economic sense. 

From a legal standpoint, a plaintiff in a construction contract dispute must prove that the defendant failed to perform under the contract, and prove that it is entitled to a certain amount of money (i.e. damages) because of the defendant’s failure to perform.

So in essence, proving damages is equally as important as proving liability. If a plaintiff fails to prove its damages, it is likely that the claims against the defendant will be dismissed. With that, an experienced attorney will review the contract and analyze the situation to determine the proper measure of damages, considering that the general rule in breach of contract cases is to put the injured party in a place they would have been if not for the offending party’s breach.

This award itself may be subject to debate when part of the measurable damages rests in determining prospective profits that may have been lost because of a breach. If you have questions about how you can resolve a construction contract dispute, an experienced attorney can advise you. 

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