Kansas residents who are involved in breach of contract disputes regarding their real estate transactions may be interested to learn about a recent case in New Jersey. In that case, a couple had contracted with an architect and a developer to plan and build their residential property. Although the architect’s plan called for the developer to test the soil, the developer failed to do so. The soil could not support the weight of the home and it cracked and became uninhabitable.
The owners sued the developer under both a theory of breach of contract as well as for fraud under the New Jersey Consumer Fraud Act. Under that particular law, they could have sought triple damages and attorney fees for their losses. The district court initially returned summary judgment on the plaintiffs’ case. The appellate court, however, reversed that decision and sent the matter back to the district court for a determination. The reasoning was that the developer had made representations about the soil quality to the plaintiffs because the requirement was attached to the contract.
In Kansas, the corollary law is the Kansas Consumer Protection Act. In a 2013 Kansas case, Stetchshulte v. Jennings, the appellate court reversed a summary judgment finding, holding that residential real estate customers could qualify as aggrieved consumers under the act.
It is important for those working in the construction and development industries to fully disclose everything and to not make misrepresentations to consumers in their contracts. If they do, the consumers may be able to sue both under a theory of breach of contract as well as under the Kansas Consumer Protection Act. Businesses may want to seek help from a business and commercial law attorney when drafting their proposed construction contracts. An attorney may be better able to protect the client’s rights and reduce the likelihood of future lawsuits.