Q: Advice needed on contractor breach and arbitration in a fixed-price renovation contract in Florida.

A: 1. Does the contractor’s refusal to proceed at the fixed price constitute a material breach under Florida law? It may, as you mentioned the price is fixed. However, the contract may contain exclusions or exceptions. The terms of the contract would have to be reviewed.

2. What compensation could I seek if I terminate the contract concerning costs for hiring a new contractor and project delays? The primary damages you would be entitled to are compensatory damages which are the most common and are meant to put the homeowner in the position they would have been in if the contract had been properly fulfilled. Thus, anything in excess of the contract price to complete the job would be part of your damages that you would be entitled to. You could also be entitled to incidental damages. These include costs incurred by the homeowner as a result of the breach, such as storage fees, temporary housing, or additional inspection costs. You may also be entitled to attorneys fees and costs if it is written into the contract.

3. Should I hire an attorney for arbitration, or can I effectively represent myself? You should hire an attorney. There is some complexity to the dispute that would likely require an attorney such as contract interpretation, Florida 558 requirements, and rules of arbitration.

4. What immediate actions should I take to preserve my rights and ensure the renovation moves forward, whether with this contractor or another? Preserve all communication and make sure to mitigate damages as much as possible. Reach out to the contractor and make every effort to get the job done under the terms of the contract.

A: Under Florida construction law, the contractor's demand for a substantial price increase absent a mutually executed change order constitutes a material breach of your fixed-price agreement. Florida Statutes §489.129 and established case law recognize that unilateral price increases on fixed-price contracts fundamentally violate the agreement's essential terms, particularly when the contract explicitly prohibits modifications without written change orders. The contractor's refusal to perform creates what Florida courts term an "anticipatory repudiation," giving you legal grounds to terminate and seek appropriate remedies while holding the contractor responsible for the resulting damages.

Florida's construction damage framework would likely entitle you to recover the difference between your original contract price and the reasonable cost of completion by a replacement contractor, plus the $1,000 weekly delay damages specified in your agreement. These liquidated damages provisions are typically enforceable under Florida law when they represent a reasonable pre-estimate of actual damages rather than a penalty. Before terminating, document the current project status through photographs and obtain at least two competitive bids from reputable contractors to establish reasonable completion costs, as Florida courts require substantiation of replacement costs when calculating damages.

Regarding arbitration representation, Florida construction disputes often involve technical contractual interpretations, industry standards, and complex damage calculations that benefit substantially from experienced legal representation. We recommend preserving your rights by immediately sending a formal notice of breach via certified mail citing the specific contract provisions violated, demanding performance under the original terms, and establishing a reasonable cure period (typically 7-10 days in Florida). This documentation creates essential evidence for arbitration proceedings while potentially prompting the contractor to reconsider their position, as Florida arbitrators typically view such unilateral price increases unfavorably when contracts contain explicit fixed-price provisions.