Foundation of a Legal Claim: Contract vs. Tort in Building Disputes

Dr. Steve Rajpatty
PhD, MBA, PGDip BA, MSc, FRICS, FAPM, FCIOB, FQSi, C.Build E MCABE, PGDip-FC, MISTT, ACIArb. Chartered Quantity Surveyor, Chartered Construction Manager, Chartered Building Eng, Practicing Affiliate of the Appraisal Institute (U.S.A.) & Management Consultant

Managing Director

When issues arise in a building or construction project, the parties sometimes face a critical decision: Should they pursue a claim based on contract or tort law? Understanding the implications and nuances of each approach is essential for construction professionals, as the choice can significantly impact the dispute outcome.

Contractual Claims: Agreed Upon Obligations

In a claim under contract law, the basis of the claim would be that one party had deviated from its obligations under the contract. For an action to be sustained for breach of contract, there must be a contract between the parties. If a contractual relationship does exist and a violation has occurred, the next factor to be considered before commencing legal action before the court is the limitation period.

The financial compensation for breach of contract is based on the rationale of placing the parties in the same position they would have been had the breach not occurred. Damages can be either liquidated, i.e. the anticipated loss is assessed, and the figure is included in the contract as the amount to be paid, or they may be unliquidated, i.e. the court considers the amount of compensation to be paid. For unliquidated damages, the assessment considers the natural loss from the breach and any additional foreseeable losses contemplated by the parties at contract formation.

Tort Claims: Damages beyond the Contract

Alternatively, a claim could also be pursued under tort law. In this action, the claimant alleges that the defendantʼs action (or inaction) caused damages despite contractual obligations. Generally, in construction, tort claims involve issues such as negligence, where one party fails to exercise reasonable care, harming the other party.

For example, poor workmanship leads to structural issues, causing property damage or personal injury. Even if the contract doesn't explicitly cover such scenarios, the affected party may seek compensation through a tort claim: Robinson v PE Jones (Contractors) Ltd [2011] EWCA Civ 9.

Factors to Consider when choosing which option to pursue

There are several factors to consider when deciding if to pursue a contract or tort claim:

Terms of the contract: If the issue is clearly addressed in the contract, a contractual claim may be more feasible.
Nature of the damage: Some types of harm, particularly physical injuries or property damage, may be more suitable for tort claims.
Burden of proof: Contract claims often require proving a breach of specific terms, while tort claims require proof of negligence: duty of care, breach of duty, causation and damages.
Available remedies: The types and extent of compensation can vary between contract and tort claims.

Other Factors to Consider

Claims are a fact of life in most construction projects. Unfortunately, burying oneʼs head in the sand is not advisable to deal with disputes that eventually lead to a claim.

The longer they go unchecked, the more complicated and expensive they can become, especially access to project data when the situation is not addressed promptly. The sensible course of action is to track and record every activity and make plans for things that may go wrong or are going bad.

The most common areas giving rise to disputes between the parties are as follows:

Lack of communication
Delays
Scope of Work
Payments
Quality of construction - falls short of the standards/specifications
Material cost changes (fluctuations).

Disputes and claims are becoming common in construction projects throughout the Caribbean region, especially as most contracts now have insurance to cover certain eventualities. Be that as it may, the best way to avoid disputes is to be aware of areas most likely to give rise to difficulties that have become synonymous with construction contracts.

Conclusion

The decision between pursuing a contract or tort claim in construction disputes is not always clear-cut. It requires careful consideration of the specific circumstances, legal implications, and potential outcomes for all parties.

By understanding the distinctions between contract and tort claims, parties in the construction industry can better protect their interests and navigate the complex landscape of construction law. This knowledge is invaluable in managing risks, resolving disputes, and ensuring successful project outcomes.

Blueprint for Progress: Insights into T&T’s Construction Sector

Dr. Steve Rajpatty
Dr. Steve Rajpatty, Chairman and Chief Executive Officer, Atlantic Project Consultants Limited (APCL)

Trinidad and Tobago’s construction sector is undergoing a transformation like never before. Complex projects, specialised expertise, and cutting-edge technology are rewriting the rules of building. At the forefront of this shift is Dr. Steve Rajpatty, Chairman and CEO of Atlantic Project Consultants Limited (APCL), who shares how innovation and collaboration are powering this bold new era.

Building Better with Specialised Knowledge

With decades of experience in the field, Dr. Rajpatty has witnessed firsthand an industry evolution: “Over the past 25 years, I have noticed a change in how projects are managed. The design and oversight of projects have become more complex, no longer handled by one or two engineers working on a major highway, such as the Sir Solomon Hochoy. In today’s industry, collaboration involves architects, engineers, quantity surveyors, and project managers—professionals who take their responsibilities seriously because contracts have become more rigorous, expanding the engineer’s role in project delivery.” Another key driver of progress in the construction sector was increased access to advanced technical training and specialised qualifications. As professionals returned to Trinidad and Tobago —driven by growing local opportunities and a desire to contribute to national development— from countries such as the UK, Germany, Canada, and the United States, they brought with them expertise not just in traditional engineering, but also in niche areas like watercourse management, hydrology, and hydraulics. This accelerated local project delivery, reducing reliance on international consultants who needed time to adapt.

Smart Solutions for Sustainable Construction

The rise of innovative technology continues to drive progress in the construction sector. Building Information Modelling (BIM) systems now enable real-time collaboration, improving cost estimates and reducing the need for rework. Tools such as drones and Geographic Information Systems (GIS) have also enhanced surveying capabilities. At APCL, high-tech systems enable geotechnical engineers and surveyors to save time and improve design accuracy. Although software tools represent a significant investment, the company views them as essential for maintaining a competitive edge in the industry. Dr. Rajpatty notes that the local construction industry is aligning with global sustainability trends by applying green building standards, enhancing energy efficiency, and improving climate resilience. “For example, the National Insurance Board of Trinidad and Tobago (NIBTT) building and its nearby campus exemplify the growing adoption of eco-friendly designs, having been LEED Gold Certified in 2016. Another significant development was the launch of the Energy Efficient Lighting Laboratory in 2022 by the Trinidad and Tobago Bureau of Standards (TTBS). Furthermore, the Caribbean Green Infrastructure Conference (CGIC 2022) showcased innovations such as grass systems to mitigate erosion and manage rainwater effectively.”

Constructing a Resilient Tomorrow

While optimistic about the construction sector’s growth, APCL’s Chairman and CEO acknowledges ongoing challenges that must be proactively addressed to ensure its future success: “There is a shortage of experienced tradesmen and supervisory personnel. The solution lies in expanding Technical and Vocational Education and Training (TVET) and promoting apprenticeship schemes. Additionally, some projects face unrealistic scheduling due to inadequate planning and design. This often leads to recurring payment delays, resulting in chronic late certification, which causes cash flow issues that limit capacity. To overcome this, procurement reforms must enforce timely public sector payments. Engineers overseeing projects can play a critical role by managing these processes and providing government departments with the necessary information to reduce delays in schedules and payments. Foreign exchange facilities also need to be extended to improve access to imported materials and equipment.” Dr. Rajpatty emphasises the need to build stronger partnerships between the private and public sectors to drive and sustain future construction projects. He believes that engaging major developers—who have land and financial resources—early in the project feasibility phase is crucial for attracting increased private investment. By adopting this approach, the government can partner more effectively with private developers to drive transformative projects in the sector.