january 24, 2018
Damages recoverable from a breach of contract are those damages which arise naturally and in the usual course of things from the breach of contract. O.C.G.A. § 13-6-2 The damages must be foreseeable by the parties at the time the contract was made as a probably result of the breach. O.C.G.A. § 13-6-2
Generally, a contractor’s measure of damages arising from breach of contract by the owner is the contractor’s profit under the contract, (contract price less what it would have cost the contractor to fully perform under the contract). Where the contractor has started construction on the job but cannot complete the job due to the owner’s default, the measure of damages to the contractor is the amount the contractor has actually spent on the job to that point, less the value of the materials left on hand, plus the profit the contractor would have realized if the job had been completely performed. The amount of damages to the contractor cannot exceed the full contract price.
If defects in construction can be remedied at a reasonable expense, a contractor is entitled to recover the contract price less the amount it would take to remedy the defects. If the owner alleges defects in construction, but the contractor has built a structure substantially adapted to the purpose for which it was built, and the owner is in use and enjoyment of the structure and the structure cannot be made to conform strictly to the requirements of the contract except by an expenditure, the measure of damages is the contract price less the difference in the value of the improvement if it had been built to contract, less the value of the improvement as constructed with the defect.