- Project plans
- Project activities
- Legislation and standards
- Industry context
Last edited 30 Nov 2020
The meaning of breach in the construction industry
If the one of the parties to a contract fails to perform as required, this may constitute a breach of contract. Such a breach may entitle the innocent party to make a claim for damages for the losses it has suffered.
A breach of contract can be a:
- Material breach: A breach which is serious, and the innocent party may also consider that it is discharged from any further obligations under the contract.
- Non-material breach: Also known as a default, this is a breach which is less serious. The innocent party may make a claim for damages, but may not consider it is discharged from any further obligations under the contract.
- Anticipatory breach: Also known as an anticipatory repudiation, this occurs when one of the parties to the contract declares to the other that they do not intend to perform their obligations under the contract.
The term irremediable breach refers to a situation in which there is a defect in the works for which the cost of rectification is unreasonable relative to the nature of the defect. Under these circumstances a deduction may be made from the amount payable relative to the amount by with the value of the works has been reduced by the defect.
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