Abandonment or Breach – Impact on Right to Lien Real Property

It is typical in a residential construction project for the homeowner and a contractor to have a dispute over scope of work, quality of workmanship, funds, or time of completion.  Where the dispute relates to what the contractor is getting paid for the work it is not uncommon for the contractor to “stop work” or simply leave the job and then file a lien for the value of work done event thought the contract is incomplete.

The owner can either challenge the lien with the merits by arguing that the work performed was not of the quality expected, or the performance was somehow not complaint with what was in the contract. By arguing that the contractor’s performance was somehow in breach a homeowner can successfully attack the amount owed but still needs to contend with the lien. If, on the other hand, the contractor is deemed to have “abandoned” the contract, the homeowner can argue successfully that the contractor’s right to lien has been waived or nullified.

Breach
A breach of contract occurs when one party fails to fulfill their obligations as specified in the contract. In construction projects, breaches can happen in various ways, such as:
1. Defective Workmanship: The contractor completes the work, but it contains defects 1.
2. Schedule Delays: The contractor fails to complete the work within the agreed timeframe.
3. Failure to Perform: The contractor does not perform the work called for  under the contract.
When a breach occurs, the non-breaching party can seek remedies, which might include damage, specific performance, or contract termination.

Abandonment of Contract
Abandonment of contract refers to a situation where a party to the contract relinquishes their rights and interests with no intent of reclaiming them .  In construction projects, abandonment can occur when contractor stops work and does not intend to return.
Abandonment is more severe than a breach because it implies a complete desertion of the project. It can lead to significant delays and increased costs as the project owner may need to hire a new contractor.

The parties to an express contract may abandon it and are released from their contractual obligations if the conduct of one party is inconsistent with the continued existence of the contract and that conduct is known to and acquiesced in by the other party. Monroe v. Fetzer, 56 Wash.2d 39, 42, 350 P.2d 1012 (1960); Wiegardt v. Becken, 21 Wash.2d 59, 73, 149 P.2d 929 (1944); In re Estate of Lyman, 7 Wash.App. 945, 948-49, 503 P.2d 1127 (1972), aff'd mem. 82 Wash.2d 693, 512 P.2d 1093 (1973); 5A A. Corbin, Corbin on Contracts 1236 (1964). Uncommunicated, subjective intent by one party to abandon is not sufficient to release the obligations. For rescission to be legally operative, all parties to the contract must consent to rescission by words or objective conduct. In re Estate of Lyman, supra at 949, 503 P.2d 1127 (citing Restatement of Contracts ss 20-22 (1934)).

Key Differences:
Intent: Breach of contract involves failure to perform specific obligations, while abandonment involves a complete relinquishment of rights and interests.
Severity: Abandonment is generally considered more severe as it indicates a total desertion of the project 2.

Legal Remedies: Both breach and abandonment can lead to legal remedies, but abandonment may also involve administrative actions such as license suspension or revocation.  Moreover, abandonment of a contract can result in the relinquishment of lien rights. When a contractor abandons a project, they may lose their right to file a lien against the property for unpaid work. This is because abandonment implies a complete relinquishment of rights and interests with no intent of reclaiming them.