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Breach of contract: The risks of not having a detailed construction contract in Mexico

Breach of contract in construction work can occur in Mexico and the most common occurrence is when the contractor does not finish the work as per the contract specifications. Additionally, there is a breach of contract when there are defects or poor quality when the work is completed.

Two different situations can occur here:

  • A construction contract exists but is rather vague, not adequately describing timelines, quality, materials and finishings. The challenge would be to prove a breach of contract regarding the finishings as promised.
  • A construction contract does not exist. Typically, there is a verbal agreement with an informal budget and payments made directly and/or in cash.

In both cases, it is critical to involve an inspector as they can establish the amounts of money the client should receive through refunds, compensations and different types of damages.

When attempting to prove breach of contract, the claimant must present:

  • The existence of a contractual relation and the terms agreed upon.
  • The identity of the property, in other words the object of the dispute.
  • The breach of the contracted terms.
  • The economic damages suffered by the claimant.

In the case of defects and hidden problems the following must be proven:

  • The execution by the claimant of the defective work.
  • The identity of the property, in other words the object of the dispute.
  • The nature, origin and cost of the defects found in the property.
  • The economic damage suffered by the claimant.

An inspector’s findings are fundamental for establishing the cause of the dispute. The inspector must be very detailed about the deficiencies and observations regarding the specifications and finishings of the work with relation to what was agreed upon by both parties, the estimated budget for calculating the cost of the repairs or corrections, as well as adding photographic evidence.

Before embarking on a construction project in Mexico, it is critical you consult a lawyer who specializes in Mexican real estate law. If you are going through a breach of contract situation, you can depend on the support of Mexlaw’s specialized litigation team in Mexico, where you can rest assured our bilingual Mexlaw lawyers will seek a satisfactory solution for your case.