Massachusetts: Contractor Might Recover on Claims Despite Breaching Contract

Massachusetts: Contractor Might Recover on Claims Despite Breaching Contract

June 20, 2018

Until last week, Contractors in Massachusetts only could succeed on a breach of contract claim if the contractor proved complete and strict performance of all contractual terms.  Furthermore, a contractor only could recover on a quantum meruit under an equitable argument if the contractor proved good faith performance of work.

However, last week the Massachusetts Supreme Judicial Court carved out exceptions to these rules, providing contractors with a chance of recovering under a breach of contract claim if the contractor's failure to strictly perform related to a non-material issue and a contractor might recover in quantum meruit despite a failure to show good faith performance.  See G4S Technology LLC v. Massachusetts Technology Park Corporation, SJC-12397 (June 13, 2019).

Breach of Contract

Old Rule: Contractor must show complete and strict performance of all contract terms to succeed on a breach of contract claim.

New Rule: Contractor still must show complete and strict performance of the design and construction and strict performance of all material contractual terms.  Contractor not barred from recovering on a breach of contract claim if contractor's non-performance relates to a non-material contractual term unrelated to design or construction.  

Quantum Meruit (Equitable Claim):

Old Rule: Contractor must show substantial performance and good faith.  

New Rule: Intentional breach of contract (lack of good faith) must be considered in the over-all context, including the value of the uncompensated work, the damage caused by the breach, the total performance by both parties, and the balancing of the equities to accomplish a just result. An intentional breach relating to the construction work itself weighs heavily against recovery.

For further guidance relating to these changed laws, please contact the author, Greg Boucher, at 617-912-0931 or gregory.boucher@saul.com.