There are many ways a project owner or contractor can breach a construction contract. The following is a list of the six most common types of claims a contractor may assert against an owner or a subcontractor might make against a prime contractor:
1. Payment claims: One very common dispute is where the owner fails to timely pay the prime contractor or the prime contractor does not pay a subcontractor on time. Cash flow is very important in construction. If the owner does not timely pay the prime contractor, then the prime contractor may have difficulty paying its subcontractors and the subcontractors may not be able to pay their sub-subcontractors and/or suppliers.
Many times, payment disputes turn on whether the owner had a valid reason for withholding funds from the contractor. For example, if the contractor has submitted a payment application for deficient work, then the owner should not have an obligation to pay for that work. But if it turns out that the work was not deficient, then the owner may have breached the contractor by not timely paying the contractor.
