Your breach or mine? – A cautionary tale for parties to building contracts

These are precarious times for the building and construction industry. This uncertainty is often heightened by standard form building contracts containing little in the way of guidance when it comes to a party being 'otherwise in substantial breach' of their obligations.

Terms such as 'substantial breach' are seldom defined in these building contracts, and it can be difficult for the parties to determine when appropriate action should be taken.

Further, taking action prematurely may expose you to liability to damages for wrongful termination.

This article considers the meaning of the term 'substantial breach' and the risk involved with taking steps prematurely to terminate a building contract for a party's substantial breach of contract.