{"id":902353,"date":"2024-02-29T15:18:11","date_gmt":"2024-02-29T22:18:11","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=902353"},"modified":"2024-02-29T15:18:14","modified_gmt":"2024-02-29T22:18:14","slug":"breach-vs-default-whats-the-difference","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/breach-vs-default-whats-the-difference\/","title":{"rendered":"Breach vs. Default \u2014 What\u2019s the difference?"},"content":{"rendered":"\n

John Mark Goodman | BuildSmart<\/a><\/p>\n\n\n\n

The words\u00a0breach<\/em>\u00a0and\u00a0default<\/em><\/a>\u00a0are often used interchangeably to indicate that somebody hasn\u2019t done what they were legally required to do. \u00a0According to Black\u2019s Law Dictionary, the words do appear somewhat interchangeable. \u00a0Black\u2019s defines\u00a0breach<\/em>\u00a0as \u201ca violation or infraction of a law, obligation, or agreement, especially of an official duty or a legal obligation.\u201d\u00a0\u00a0 It similarly defines\u00a0default<\/em>\u00a0as \u201cthe omission or failure to perform a legal or contractual duty.\u201d\u00a0 While those \u00a0definitions may suffice in common parlance and many areas of the law, in the construction law context\u00a0breach<\/em>\u00a0and\u00a0default<\/em>\u00a0may have different meanings that can have important legal consequences.\u00a0 See\u00a0LeChase Construction Services, LLC v. Argonaut Insurance Company<\/a><\/em>, No. 6:20-CV-06915, 2024 WL 554297, at *3 (W.D.N.Y. Feb. 12, 2024).<\/p>\n\n\n\n

LeChase<\/em> involves a contractor\u2019s claim against the surety of a subcontractor.  The language of the surety bond required any claim to be made within one year of any \u201cdefault\u201d by the subcontractor.  The surety moved for summary judgment arguing that the contractor\u2019s claim was untimely.  In support of this argument, the surety pointed to a change order issued by the contractor more than one year before making the bond claim.  The description on that change order stated that it was for costs due to the subcontractor\u2019s \u201cbreach of contract.\u201d  It was thus undisputed that the subcontractor had breached the contract more than one year before the surety bond claim was made.  The question remained whether a \u201cbreach\u201d is equivalent to a \u201cdefault.\u201d  To answer that question, the LeChase<\/em> court looked to the common law (i.e. judicial opinions) because the term default was not defined in the surety bond itself.  The court held that in the context of construction suretyship law, those terms are not equivalent:<\/p>\n\n\n\n

\n

[N]ot every breach of a construction contract constitutes a default. \u2026 A legal default requires a material breach or series of material breaches such that the obligee is justified in terminating the contract<\/u><\/strong>\u2026.Thus, there is a distinction in the concepts of \u2018breach\u2019 and \u2018default\u2019 that is to be recognized in construction suretyship law.<\/p>\n<\/blockquote>\n\n\n\n

The court therefore refused to hold as a matter of law that the contractor\u2019s claim was untimely.  Even though the subcontractor was undisputedly in breach<\/em> more than one year before the surety bond claim was made, that did not necessarily mean the subcontractor was in default<\/em>.  The court therefore denied the surety\u2019s motion for summary judgment, permitted the contractor\u2019s bond claim to proceed, and provided a valuable lesson about how context matters.<\/p>\n\n\n\n

\n\n\n\n

When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes – please call Advise & Consult, Inc. at 888.684.8305, or email experts@adviseandconsult.net<\/a>.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

John Mark Goodman | BuildSmart The words\u00a0breach\u00a0and\u00a0default\u00a0are often used interchangeably to indicate that somebody hasn\u2019t done what they were legally required to do. \u00a0According to Black\u2019s Law Dictionary, the words do appear somewhat interchangeable. \u00a0Black\u2019s defines\u00a0breach\u00a0as \u201ca violation or infraction of a law, obligation, or agreement, especially of an official duty or a legal obligation.\u201d\u00a0\u00a0… Continue reading Breach vs. Default \u2014 What\u2019s the difference?<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[11015],"tags":[9895,26],"class_list":["post-902353","post","type-post","status-publish","format-standard","hentry","category-construction-claims","tag-advise-consult","tag-construction-claim","entry"],"jetpack_publicize_connections":[],"yoast_head":"\nBreach vs. Default \u2014 What\u2019s the difference? 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