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Miami Beach Restaurant and Construction Firm Locked in Legal Dispute

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According to reporting from The Real Deal, CBMIA, a company that is planning on opening up a new restaurant in Miami Beach, has filed a breach of contract lawsuit against its construction firm, U.S. Construction Corp. (USCC). In response, USCC has filed a countersuit that also alleges breach of contract. CBMIA blames USCC for a multi-month delay in the opening of the new restaurant, while USCC counters that CBMIA both failed to make timely payments and terminated the contract without proper notice.

The Background of the Dispute

Reports indicate that the two companies entered into a construction contract in January of 2016. Originally, the value of the contract was $3.7 million, though, changes in the order soon increased the overall price to nearly $4.3 million. From the time the contract was first signed in January through the end of September, USCC performed work on the project site. Around that time, a dispute arose and the project came to a sudden halt. CBMIA argues that work had to stop because the construction company breached the contract. According to CBMIA, the agreement was breached because the contractor was unable to perform its duties in a timely manner. Indeed, the restaurant owner argues that the project fell seven months behind schedule due to USCC actions. These allegations led CBMIA to unilaterally terminate the contract and hire an alternative construction firm. USCC countered that this termination was unfounded and that the restaurant owner failed to provide ‘reasonable notice’ of the termination. As such, USCC argues it was CBMIA’s actions that constitute a breach of contract. USCC is seeking a construction lien in excess of $700,000 to remedy the alleged breach.

When Can a Company Terminate Actually Contract?

Unfortunately, not all business relationships work out. Entering into a contract, especially a complicated construction-related contract, comes with some risks. As such, it is imperative that companies on all sides of these agreements take proactive steps to protect themselves in the event that something goes wrong. This means two different things:

  1. Your business needs to be able to escape from any agreement without being forced to pay excess fees.
  2. Your business needs to protect itself from the other company suddenly walking away from the deal.

To do both, your construction contract must have a well-drafted termination clause. Ultimately, a company’s ability to unilaterally terminate an agreement will depend entirely on the specific language included in the contract. Contracts should always be drafted, negotiated and reviewed by an experienced attorney who can ensure that the agreement is effectively protecting your company’s right and interests.

Do You Need Legal Advice?

The West Palm Beach commercial litigation attorneys at Pike & Lustig, LLP can help. For immediate assistance with any contract law or business litigation issue, please do not hesitate to call our office today at 561-291-8298 to set up your free initial legal consultation. We proudly serve businesses throughout South Florida, including in Miami, Pompano Beach, Oakland Park, Coral Gables, Miami Gardens and South Beach.

Resource:

therealdeal.com/miami/2017/01/27/coco-bambu-restaurant-owners-and-construction-company-locked-in-litigation/

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