Chapter 20 Claims outside the contract

The relationship between parties to a construction contract is primarily governed by the contract they have between them. Contracts are usually in writing and often take the form of standard industry based contracts, but can sometimes be oral and/or informal in nature.

When things go wrong, a party will usually firstly look to the contract to understand what its are rights and what remedies under the contract might be available. The contract is not the only source of rights or remedies.

A party may look outside the contract to claim relief if:

  • there is not an appropriate remedy under the contract;
  • the contract excludes the desired remedy or relief;
  • a greater or alternate benefit can be claimed pursuant to a remedy outside the contract; or
  • the contract itself may be unenforceable for some reason;

Where relief is not available under a contract, a party can still seek to claim relief under general principles of law (developed by the courts) or under an applicable statute. The various claims that may be available to a party include:

  • negligence (and other similar claims);
  • claims under statute;
  • good faith;
  • estoppel and waiver; and
  • quantum meruit.