Legal Question in Construction Law in Florida

Re: Breech of contract

The case of Ballard v. Krause 248 So.2d 233, *234 -235 (Fla. 4th DCA 1971) answers this question:

The question 'What is a contractor's measure of damages when an owner wrongfully terminates a contract?

Generally, the measure of damages where the cause of action is on breach of contract is lost profit that would have been realized and costs reasonably incurred in good faith in partial performance of the contract. Poinsettia Dairy Products, Inc. v. Wessel Co., 1936, 123 Fla. 120, 166 So. 306. The burden of establishing profit, as if there had been no breach of the contract, is on the contractor. Profit may be established by showing the total cost and expenses of labor, services and materials necessary to perform the contract and then deducting that sum from the contract price. The result is the profit. This may be expressed in the formula 'BP equals C minus Z' in which the builder's profit is 'BP,' the contract price is 'C' and the total costs of the builder for performing the contract are 'Z.'

Where the cause of action is in quantum meruit, the contractor may treat the contract as void and seek those damages that would put him in the same position that he was immediately prior to the making of the agreement, in which case the contractor's measure of damages is the reasonable value of the labor and services rendered, and materials furnished. Dade County v. Palmer and Baker Engrs, Inc., 5 Cir. 1963, 318 F.2d 18. The contract price generally is the upper limit where the contractor sues in quantum meruit, but in the event the owner's breach is willful, the *235 contractor may recover his outlay even if it exceeds the contract price. Also, in quantum meruit a contractor may recover expenses in preparing to perform. However, this element of damage is not available to a contractor if the contractor is suing on the contract. Sullivan v. McMillan, 1890, 26 Fla. 543, 8 So. 450. In either event, damages recoverable on either theory, breach of contract or quantum meruit, must be proved with reasonable certainty and cannot be left to speculation or conjecture.

Good luck,

Randall Gilbert