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.

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Many commercial construction contracts have deadlines for the contractor or subcontractor to complete its work. Typically, a contractor is entitled to the time allowed under the contract to finish its work. If a contractor is forced to complete its work earlier than the specified completion deadline, the contractor may be entitled to additional compensation for accelerating its work.

There are two types of acceleration–actual acceleration and constructive acceleration. Actual acceleration occurs when a contractor is expressly directed to pick up the pace of the work. Constructive acceleration happens when a contractor is entitled to a time extension, but the project owner refuses to give the time extension and requires the contractor to complete its work by the original deadline.

Continue Reading The Basics of Contractor Acceleration Claims