A building contractor agrees to construct a small office building for a client. Per their contract, the contractor is required to use a high-quality material specified in the terms of the agreement for critical beams. However, during construction, the contractor substitutes a lower-grade material without informing the client. The client discovers this and requests that the beams be replaced with the specified material. The contractor refuses, asserting that the substitute material is widely used in the industry and complies with safety standards. How should this substitution be evaluated under contract law?
The client’s remedy may involve seeking damages if the substitution significantly affects the building’s overall value.
The contractor's substitution is acceptable because the material is widely used and argued to meet safety standards.
The contractor breached the agreement by failing to meet a specific requirement of the contract.
This is a less significant breach because the building’s structural integrity is not affected.
The contractor’s substitution of lower-grade material constitutes a material breach because it involves failing to fulfill a specific and negotiated term of the contract. A material breach occurs when a key obligation of the contract is not performed, depriving the other party of the benefit they reasonably expected to receive. In this case, the specified high-quality material was part of the agreement, and its use was likely central to the client's requirements. Arguments about industry standards and safety do not override the express terms of the contract unless explicitly permitted by the agreement. The client is therefore justified in requesting remedies for the breach. Answer options discussing safety or claims of a minor deviation are incorrect because they do not address the contract's terms as negotiated.
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