In construction, disagreements with builders, subcontractors and owners will occasionally happen. When they turn serious, however, you need to know the difference between a breach of contract and a breach of warranty — as well as how that may ultimately affect your legal options.

How does a breach of contract and warranty differ?

Plaintiffs file breach of contract lawsuits in cases in which they allege that a defendant failed to uphold their obligations as laid out in any formal agreement.

A warranty contract, in contrast, is an assurance that a manufacturer or contracted party extends to a buyer regarding their product or service that extends a guarantee of workmanship or durability for a set amount of time.

How can disputes over warranties or contracts be settled?

Plaintiffs in breach of contract cases may have several options. They may ask for specific performance, which can obligate the defendant to fulfill their end of the bargain. They may also sue to terminate the agreement entirely. Plaintiffs may also request reimbursement of fees that they paid for the items that they didn't receive or the services that their contractor didn't perform.

Individuals who file a breach of warranty cases often only seek damages for lack of performance when filing a lawsuit. The Uniform Commercial Code (UCC) regulates how the exchange of any compensation may occur in breach of warranty cases. The plaintiff often receives the difference between the promised item's or service's value when successful with their suit.

How should you handle a potential claim?

You cannot afford to ignore complaints when a customer accuses you of not delivering on your word, whether that has to do with a contract or a warranty. You may find it helpful to consult with an attorney who has extensive experience working with contractors, developers and other players in the New York construction industry. Construction and contract disputes can often be settled through negotiation, but only if you act quickly.