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Homeowner's Refusal to Make One Payment in a Construction Installment Contract Constitutes a Substantial Breach of the Contract

July 03, 2008  |  from South Carolina Construction Law - Discussion of mechanic's liens, delay claims, coverage, and constr

    The South Carolina Court of Appeals recently decided that a homeowner's refusal to make an installment under construction contract constituted a substantial breach of the contract.  See Silver v. Aabstract Pools, 376 S.C. 585, 658 S.E.2d 539 (Ct. App. 2008).

    A homeowner and contractor contracted for the construction and installation of an in-ground swimming pool. The contract called for five payments upon the completion of five scheduled tasks. The homeowner made three of the payments according to the schedule, however, the homeowner refused to make the fourth payment because he opined that the job was only approximately 20% complete and the payment schedule did not correlate with the progress of the job. The case was heard by the Master-in-Equity who determined the contractor had breached the contract when the contractor ceased work on the project and removed his equipment because the plaintiff refused to make the required payment. The contractor appealed the decision and the Appellate Court found in his favor. The court held that the contract was clear and unambiguous. Furthermore, the court refused to look beyond the four corners of the contract to determine its meaning. The homeowner could not change the agreed upon terms in midstream because he was unhappy with them. The court found no evidence that the contractor had breached the contract, and since the homeowner’s refusal to pay was a substantial breach of the contract, the contractor had the right to cease work and recover the value of work already performed. As the first party to breach, the homeowner must bear the liability of his nonperformance. The court awarded the contractor damages for the nonperformance, attorneys’ fees, and court costs. 

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Filed: Construction-Law