What Is a Breach of Contract?
A breach of contract in the building context occurs when one party to a building contract fails to perform their obligations as agreed. This can be the builder failing to complete work to the required standard, missing agreed deadlines, or using materials that differ from the specifications. It can also be the homeowner failing to make agreed progress payments or provide necessary access to the site.
Types of Breach
Building contract breaches generally fall into several categories:
- Minor breach — a relatively small deviation from the contract that does not prevent the project from being completed (e.g., using a slightly different paint colour). The non-breaching party can claim damages but typically cannot terminate the contract.
- Material breach — a significant failure that undermines the purpose of the contract (e.g., major structural defects, extended abandonment of the site). The non-breaching party may be entitled to terminate the contract and claim damages.
- Anticipatory breach — when one party indicates in advance that they will not fulfil their obligations (e.g., the builder announces they cannot complete the project).
Common Builder Breaches
- Failing to complete work within the agreed timeframe
- Performing defective or substandard work
- Using materials that do not meet contract specifications
- Abandoning the project
- Not holding required licences or insurance
- Subcontracting work without approval
Remedies Available
| Remedy | Description |
|---|---|
| Damages | Monetary compensation for the loss suffered |
| Rectification order | Tribunal or court orders the builder to fix the defective work |
| Contract termination | Ending the contract and engaging another builder |
| Tribunal/court action | NCAT, VCAT, QCAT, or equivalent state tribunal |
How It Relates to Licence Verification
Hiring an unlicensed tradesperson significantly weakens your legal position in a breach of contract claim. Some states restrict unlicensed contractors from enforcing building contracts or claiming payment. Conversely, licensed builders are accountable to their licensing body, giving you an additional avenue for complaint and resolution. Verify your tradie’s licence through TradieVerify before signing any contract.