Betterment and Reasonability in Construction Law Contracts
As a general rule, when there is a breach of contract action, a party that has been injured by a breach, must receive the “benefit of the bargain”—that is, the party can receive whatever benefit it would have gotten had the contract been performed. However, a party is not supposed to benefit, or get a windfall, or derive a benefit greater than what would have been realized had the contract been performed.
When it comes to construction law contracts a party can only receive the cost of bringing property to the condition it would have been in had the construction contract been performed. Additionally, a party can often receive delay damages, which are damages that are directly caused by delays caused by the breach of the construction law contract.
That means that someone that sues a builder, or construction company, must show their actual damages—that is, what the repairs should cost, if performed correctly. Estimates can sometimes be used to show damages as well, if for some reason actual costs can’t be proven.
The Betterment Defense
But a common defense to construction law disputes, is “betterment.” That means that a party is not just seeking to get the construction contract performed (or performed properly), but rather that the party is trying to profit, or “do better” than it would have done had there been no breach of contract. These damages are not allowed.
For example, if your construction contract called for a cement floor, and there’s a dispute, the contractor can’t be compelled now to put in a marble floor, as a part of the repairs or as an element of damages.
If a builder or contractor is making repairs, the owner can ask the contractor to provide an upgrade from what was contracted for originally—but the owner would have to pay the difference in the upgrades.
Necessary Upgrades and Reasonability
There can be situations where upgrading necessarily requires an upgrade, or where replacement of one part of a structure, means another, otherwise perfectly fine part of a structure, must be altered, destroyed, repaired or rebuilt. This is an exception to the betterment defense. If such destruction of otherwise “good” parts of the property are necessary to perform the contract properly, they can be demanded by the contractor.
As an example, if a painting job is defective, before it is repainted, the surface may have to be peeled, sanded, and primed. The costs of peeling and priming are reasonably necessary to repaint the surface, as contemplated by the original contract.
Ultimately, betterment depends on what is reasonable. If an improvement is necessary and reasonable to complete the terms of a contract, then it will be allowed. If it is unreasonable then it will be considered betterment, and thus, that amount of damages that constitutes the upgraded improvement, are not allowed.
Call our Florida construction attorneys at Sweeney Law P.A. at 954 440-3993 for a consultation or help with your construction law contracts and agreements.