Legal Blog

Construction Deposit, Repudiation, Forfeiture

Aylward v. Rebuild Response Group Inc. 2018 OntSCJ

Construction contract called for 25% deposit of $175,000, which was paid. The owner cancelled the contract after meetings, positions taken, and correspondence. The judge held that (i) the contractor’s failure to commence construction was reasonable under the circumstances, (ii) the contractor did not fundamentally breach the contract, and (ii) by terminating it, the owner repudiated the contract. The contractor accepted the repudiation and claimed the deposit. The judge held that the money paid was indeed a deposit and not merely a part payment of the contract price. The judge refused to exercise his discretion to grant relief from forfeiture because the deposit amount was relatively close to the contractor’s actual damages and its payment was not unconscionable.

Written by Jonathan Speigel, the founding partner of Speigel Nichols Fox LLP, leads the litigation and construction practices.