Last edited 17 Apr 2018

Default in construction contracts

A default is a non-material breach of contract, whereby one party fails to perform a contractual obligation. What specifically constitutes a default will be set out in the contract terms, but generally, it can be defined as an omission or a failure to do what is expected or required.

If one party defaults, the other party may make a claim for damages, but may not consider it is discharged from any further obligations under the contract. This prevents the innocent party from avoiding their overall obligations because of a minor breach of just one part of the contract.

This is different from a serious, material breach of contract (although the distinction is not clear cut) which may allow the innocent party to consider that they are discharged from any further obligations under the contract.

NB This use of the term default differs from its use with regard to a debt, which is when a debt has not been paid by its due date.

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