October 8, 2021
Let’s imagine we are at NCAT for a home building dispute for a homeowner who has paid most of the contract price but has received very little home building works from the builder.
If the home owner pleads breach of contract seeking damages and not clearly plead if the contract has been terminated and how. The home builder is risking a finding that the contract is still on foot.
If such finding is made, orders will most likely be in line with the legislated preferred outcome as set out in s 48MA Home Building Act 1989 (NSW) which is rectification of defective works by the responsible party, ie the builder.
For incomplete works, the builder will be ordered to go back and complete the works. This is usually not the best outcome for the home owner as he/she will not want the builder to return to premises.
Worst still, the home owner might have contracted other builders to complete the works in which case he/she cannot recover monies paid to the other builders as the contract with the initial builder is still on foot.
To avoid this scenario, pleading must clearly set out how the contract has come to an end. In this case, if there is evidence to prove “repudiation” of the contract, the pleading has to say repudiation by conduct for example. The job is not yet done, however. When faced with repudiation, the wronged party can choose to either terminate the contract or accept the repudiation and keep the contract “on foot”. The contract does not automatically come to an end by repudiation. It, therefore, has to be specifically pleaded that the contract is terminated (and have evidence at the ready to support that) and then seek damages.
This is not legal advice and should not be relied as such. For your legal questions, please contact our office on 02 8014 5818 or email email@example.com