How is cost to complete calculated after contractor default?
Cost to complete is the reasonable cost to finish the remaining scope plus the cost to correct defective work and any extra reprocurement and delay costs. The owner's damages are the amount by which that total exceeds the unpaid balance remaining on the original contract.
Can I recover the excess cost of completion from the defaulting contractor?
Yes. Where a contractor wrongfully abandons or is properly terminated for default, the owner can generally recover the reasonable excess cost of completing the work over what would have been paid under the original contract, provided the owner mitigates and the costs are reasonable.
What role does a performance bond play?
If the project is bonded, the performance bond surety is responsible for the contractor's default and typically funds completion — by financing the original contractor, arranging a replacement, or paying the owner's excess completion costs — up to the bond's penal sum.
Do I need to prove my completion costs were reasonable?
Yes. Courts require the owner to act reasonably and mitigate. Keep detailed records of the replacement tender, invoices, and any premium paid so you can show the completion costs were reasonable and caused by the default.