For one reason or another, construction contracts in North Carolina and elsewhere often fail to be completed as written. During the course of an extended contract involving a substantial construction project, various disagreements can arise regarding the contract’s intent. Breach of contract is thus a relatively common allegation that arises when two parties to a construction contract do not agree on some aspect of performance under the agreement.
A recent example involves a nearly $4 million argument between a construction company and a regional energy provider. The contractor brought a lawsuit in a state court claiming the energy company owed the final balance due on their construction contract. The agreement allegedly required the contractor to install chilled water, steam and hot water systems according to the energy company’s specifications. The company agreed to pay the contractor the sum of $8,870,970 for the total job.
However, it’s alleged in the lawsuit that the energy company raised various unjustified disputes and failed to make final payment of the remaining balance of $3,921,637.99. The contractor claims that it finished all of the work as of July. There were alleged disputes onsite between the contractor and the thermal engineers for the energy company. The contractor alleges that the engineers provided flawed design specifications that turned out to be incorrect.
It’s typical in North Carolina for construction contracts to provide for partial payments as the work progresses. Generally, at the end of each specified phase of work, payment is made after the work is inspected and approved. Sometimes, that party will stall in making the final payment due. That might be because of a legitimate dispute, or it could simply be due to the desire to control the cash flow until the last possible moment. In the latter event, the party failing to make payment may be sued for breach of contract and compelled to pay the balance, along with interest, costs, and legal fees as may be provided in the written agreement or by law.
Source: The Louisiana Record, “Boh Bros. files breach of contract claim against Entergy for nearly $4 million“, Max Schramel, Nov. 24, 2014