Factors That Make a Construction Contract Moot

When your company enters a contract agreement for construction work, understanding the terms is only the beginning. To fully understand the situation you’re agreeing to, it’s essential to know what factors can potentially render your construction contract moot. The precise construction contract terms could make a difference for your Ohio construction insurance, and a violation of the contract premise could potentially render the whole contract null and void. Here are the primary situations where this could occur that your company should be aware of.

The Contract Is Found To Be Out of Compliance With Relevant Laws

For any contract to be valid, it has to comply with all relevant laws. Therefore, if a contract is found to be out of compliance or in conflict with the law, it cannot be enforced. This holds true whether or not the parties signing on to the contract were aware that the contract broke the law at the time of signing. Note, however, that it may be possible to draw up and sign a new contract that does fully comply at a later point in time.

There Was Prior Breach of Contract or Misrepresentation

If one of the parties involved in signing the contract knowingly misrepresented the facts at the time of signing, this alone may be enough to invalidate the contract. A common example is if a contractor signs for a project requiring local licenses without having those licenses. Additionally, note that prior breach of contract can render construction contracts moot as well. This is different from misrepresentation in that the facts were accurately stated at the time of the signing, but one party breached the terms of the agreement. In this situation, the party that breached the contract will no longer able to enforce its terms.

One Party Was Coerced or Lacked the Capacity To Sign the Contract

No contract signed by parties who were coerced into signing, or who do not have the legal capacity to sign such a document, can be valid. In these situations, capacity depends on legal specifics like someone’s age and mental health. For instance, an individual who is incapacitated or not of legal age cannot enter into a contract, so any contract signed by such an individual would be moot. Additionally, coercion can nullify a contract, since contractual agreements require that all parties enter the contract of their own free will. Some examples that may qualify as coercion include:

  • Cornering one party in a situation where they have no choice but to sign
  • Pressuring the other party to sign or threatening them if they do not sign

Before you agree to a contract, it may be essential for Ohio construction insurance purposes and for your company’s information to fully understand the factors that could render that contract moot. With extra knowledge of these situations, you can proceed with future construction contracts fully informed.

About Haughn & Associates 

Founded by Michael Haughn in 1986, Haughn & Associates is a full-service, family-owned, independent insurance agency based out of Dublin, Ohio. H&A strives to provide the best possible price and unique insurance solutions across a myriad of industries, including construction, IT, Habitation & Commercial Property, Agriculture, and Engineering. Devoted to providing the best of business insurance, life and disability insurance, personal insurance, employee benefits, and bonds, H&A is proof that success lies in long-standing client relations and satisfaction. To learn more about how H&A can be of service to you, contact us at (877) 802-2278.