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LegalKnowledge, Attorney
Category: Legal
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Experience:  10+ years handling Legal, Real Estate, Criminal Law, Family Law, Traffic matters.
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NY remodeling contract, no clause or convenience. Owner

Customer Question

NY remodeling contract, no clause for termination for cause or convenience. Owner incurs material breach of contract by sending written stop request, changing locks, and witholding payment without any reasoning. Is the contractor entitled to the full price of contract without finishing the work?
Submitted: 1 year ago.
Category: Legal
Expert:  LegalKnowledge replied 1 year ago.

Good morning. Did the owner advise why they would not allow the contractor to perform the work? Also, the contact is in writing?

Customer: replied 1 year ago.
Lets keep things simple. I am not asking wether the contract is valid. Owner has given no reason and contract is in writting. I would like to know what the requirements are to be entitled to demand the full price of the contract without finishing the work. I know in some cases the contractor can walk out and still get paid for the full contract.
My question is when does a material contract breach "excuses the non-breaching party from any further performance under the contract" (and get paid full contract price); and when would the contractor only be entitled to "quantum meruit" plus loss of profit, and other damages.
Expert:  LegalKnowledge replied 1 year ago.

Simply is always better. Once the owner prevents and does not allow the contractor the finish the job, there would be a material breach. If the contractor is ready, willing and able to perform under the contract and they are prevented from, through no fault of their own and as a direct result of the owner/other party, there would be a breach. At that time, they would be entitled to be paid for the work performed / benefit conveyed onto the owner AND any lost profits, had they expected to make, once the job was complete. If there was no contract, then quantum meruit would apply. Quantum meruit determines the amount to be paid for services when no contract exists or when there is doubt as to the amount due for the work performed but done under circumstances when payment could be expected. In this case, you shared that there was an contract, so it should have detailed the cost for the work which was agreed to.

Customer: replied 1 year ago.
The contract states the price for the full contract, owner stopped work so obiosuly the work wasn't 100% done, the question is in what circumstances is contractor entitled to 100% of the contract price? Contract stated lump sum, so its not severable ....obviously whether the work is completed 60% or 90% could be disputed and open a can of warms.
I have heard of contractors being able to get paid the full amount of the contract in certain circumstances without finishing the work when owner stops work by no fault of contractor (matrials delivered, ready to work, etc...).
As stated before assumed material breach of contract , the question is in what circumstances (other than work done 100%) is contractor entitled to 100% of the contract price.
thank you
Expert:  LegalKnowledge replied 1 year ago.

Yes, I do understand. However, it depends. If the contractor went and bought all the materials, then they would be entitled to the contract amount, since the total price of the job was for the materials, labor and profit. However, if the materials were provided and/or only a portion were bought, then the contractor could not recover when there were no losses incurred. A court will award damages to a party and those are for lost profit, labor and materials.