Q: Client entered a signed/executed construction contract which he breached. What are the options for monetary loss?
Mid work the client stopped the contractual payments due to his stating of financial/loans delays on his part. Client then requested structural changes to cut cost delaying production time and creating loss of opportunity. After about 6 months of constant communication and proposed changes to the plan, the halted work due to the delay on the clients behalf was canceled by the client via text. With no official cancelation my team and I stopped by the jobsite by appointment and witnessed that a new crew was executing the work we had originally contracted for. At this point of time the client was not fully paid up for our labor and constructions costs with our company. It was discovered when contacting the city on our company’s active permit that the client was applying for an independent permit. The client still owes on the work performed as well as still having an open contract. Our company would like to preserve its rights and recap the monetary damages by this breach of contract.
A:
Under California law, when a client breaches a construction contract, you have several options for recouping monetary losses. First, you can send a formal demand letter to the client outlining the breach and requesting payment for the work performed and any other damages incurred due to the breach.
If the client fails to respond or pay, you may consider filing a lawsuit for breach of contract. In the suit, you can seek compensation for the unpaid work and potentially for lost opportunity or other damages caused by the breach.
Another option is to file a mechanic's lien against the property if the time frame for filing such a lien has not expired. This lien can secure the amount owed to you for the work performed.
It's also important to review the contract for any clauses that specify remedies or steps to be taken in the event of a breach.
Given the complexity of construction law and the specifics of your case, it would be advisable to consult with an attorney who has experience in construction law and breach of contract cases. They can provide guidance tailored to your situation and help you navigate the legal process to protect your rights and interests. Remember, timely and appropriate action is key in these situations.
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