What Types of Damages Are Available for a Breach of Contract by a Contractor - construction attorney - Alves RadCliffe

What Types of Damages are Available for a Breach of Contract by a Contractor?

Construction law is one of the most complex types of legal practices that frequently involves several issues surrounding a dispute between a property owner and a general contractor. Several different parties that include a homeowner, general contractor, material supplier, lending institution, and/or one or more special contractors can become embroiled in a legal dispute that takes a considerable amount of time and financial resources to resolve. Receiving legal support from an experienced construction attorney significantly boosts your case against a general contractor during a breach of contract dispute.

Hiring a construction attorney provides you with several types of legal support. First, a lawyer conducts a thorough investigation into your case. For a breach of contract, this involves reviewing the contract to determine the legal obligations placed on the general contractor. Your construction attorney then decides whether the general contractor has violated any of the legal obligations written into the contract. If the general contractor discovers one or more violations of the construction contract, you consult with your attorney to agree on the best solution to resolve the breach of contract. Another benefit of hiring a construction attorney is to learn the statute of limitations for construction defects in California.

Construction contracts establish the terms of a project, as well as ensure all parties involved in a project comply with their legal obligations. When all parties involved fulfill their legal obligations, construction projects typically run smoothly from the first to the last day of a project. However, when one party breaches a construction contract, chaos can ensue to the point when a construction project comes to a halt.

Let’s review the most common types of damages for a breach of contract by a contractor.

Compensatory Damages

As one of the most common types of compensation awarded for a breach of contract, compensatory damages cover the unfilled financial obligations written into a contract. This can include paying for the cost of materials, repairs to damage, and/or the hiring of a new general contractor to complete the project. Receiving compensatory damages might require your construction attorney to determine whether the general contractor committed one or more acts of negligence.


Restitution returns all of the money promised by a property owner. This type of compensation is approved when a general contractor fails to complete any phases of a construction project. For example, if a general contractor agreed to complete three phases of a $500,000 renovation project and the general contractor failed to complete any of the project phases, the property owner can request restitution valued at $500,000.

Liquidated and Nominal Damages

Liquidated damages help all parties involved to avoid a bitter dispute. This type of damage is automatically agreed to because of the wording of a construction contract. The parties involved agree a breach of contract has occurred, but they decide to proceed with the project while handling the issue or issues involved in a professional manner. Nominal damages refer to the awarding of damages for a breach of contract, but the breach did not cause significant financial losses to either party.


Rescission is a legal term that refers to terminating the rights of all parties involved in a construction project. It puts every party involved in the positions they held before signing a construction contract. Rescission is a common remedy because it does not require the parties to continue working together on a construction project.

Alves Radcliffe, LLP — Construction Attorney

If you need assistance with an indemnity clause in your construction contract, call Alves Radcliffe, LLP at 916-333-3375 or send us an email. We have over 25 years of combined experience, and serve clients throughout Greater Sacramento, Northern California, and the San Francisco Bay Area.

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