Analyzing the Legal Implications in Breach of Contract: A Case Study of Able Demolition v. City of Pontiac

By Carlos Vazquez Rosario, January 28, 2026

In contracts relating to municipal, legal, or regulatory matters, adherence to established procedures is imperative and serves as a fundamental prerequisite for entitlements.

The “Federal Acquisition Regulation” or “FAC” under part 37, “Service Contracting”, explains in detail the prescribed policy and procedures that are specific to the acquisition and management of services by contract. All contracts and orders for services, regardless of the contract type or service being acquired, must apply these standards to enforce clear conditions precedent and procedural safeguards in contracts (FAR | Acquisition.GOV, n.d.).

(B.A.B.L (Hons), 2023)

Subpart 37.3 “Dismantling, Demolition, or Removal of Improvements” explicitly prescribes the procedures to contract for the dismantling or demolition of buildings. This includes labor standards, bonds or other securities, payments, and contract clauses (FAR | Acquisition.GOV, n.d.). In conjunction with contract law, the body that enforces, interprets, and governs agreements related to an exchange of services, properties, goods, or money allows the establishment of a contract that is legally binding and without breaches to the most optimal conditions (cydni, 2015). This informational knowledge is what could make the difference between agreeing to an exemplar contract between two parties that promise to do something in return for a gain or advantage, and at the conclusion of the terms, everything has been accomplished.

In Able Demolition v. City of Pontiac, based on my analysis and opinion, it may be observed that, because of a lack of knowledge or failure to properly apply the contract law to the maximum expectation, the contract was breached, resulting in a loss for Able Demolition, Inc.

Background

On July 1, 2004, Able Demolition entered into a contract with the City of Pontiac to demolish abandoned homes. The agreement stipulated that Able was required to obtain a written "Letter to Proceed" before demolishing each building. Although Able demolished several buildings, it failed to secure written approval for 11 of those properties, leading Pontiac to withhold payment of $42,299 for that work. In response, Able filed a lawsuit against Pontiac, contending that it had substantially performed its obligations under the contract and was therefore entitled to compensation (LEGL710, n.d.)

The court ultimately disagreed, affirming that the contract clearly mandated written approval before demolition and payment. The ruling emphasized that when contractual language is unambiguous, it must be enforced as written. In this instance, the court determined that Able Demolition's requirement that a written letter be obtained before each demolition constituted a condition precedent to payment. Even viewed as a general contractual obligation, the court found Able's failure to obtain the necessary approval to be a substantial breach, noting that this stipulation was intended to protect property rights and limit Pontiac's legal liability. As a result of Able's disregard for this critical requirement, the court ruled that Pontiac was not obligated to make payment (LEGL710, n.d.).

Did the Court Arrive at a “Fair” Decision?

Based on the circumstances, opinions could be distinct, as people could see this case as unfair because Able’s company was working for the city itself, which could facilitate the required “Letter to Proceed” for demolishing each building in advance, as this was a project developed by Pontiac. However, there was a contract with a clear condition precedent to both performing each demolition and receiving payment, stating that if a letter is not obtained before any demolition, payment will be forfeited per structure. This makes the courts rule “Fair” in contract law terms and defensible on public policy grounds, even though it feels challenging to Able after completing all the hard work when the court refers to the case Farm Bureau Mut. Ins. Co. of Michigan v. Nikkel, 460 Mich. 558, 570, 596 N.W.2d 915 (1999) implies that the language of the contract is unambiguous, and it will be enforceable as written (LEGL710, n.d.).

The court appropriately rejected Able’s claim because the company did not comply with the contract's terms and conditions. Able maintained that, having completed the demolitions, which represented the primary objective of the contract, it had substantially performed its obligations and warranted payment, meaning that it entailed fulfilling the essential purpose of a contract, albeit with minor deviations (Substantial Performance, n.d.-a). However, this principle is not applicable when shortcomings are significant enough to undermine the contract's core requirements. The court accurately dismissed this argument, emphasizing that the contract encompassed not only the demolition of buildings but also strict adherence to legal protocols meant to protect property rights and mitigate the city's liability. When Able failed to obtain the required letters, it constituted a substantial breach rather than a minor deviation.

Would I Have Ruled Equal to the Court?

Possessing these specific laws, regulations, and policies that explicitly explain the standard contract doctrine and the facts in the record would not allow me to rule differently. The contract was overly clear and explicit, stating that Able must obtain a written “Letter to Proceed” from the Director of Law on the day of each demolition before proceeding with the actions, and that if these actions are taken without approval, the payments per unit demolished shall be forfeited. Additionally, Able admitted to the actions when it stated that it substantially performed under the contract, and it did not materially breach the agreement when it failed to obtain the letters to proceed. This explicitly shows the court that Able understood their actions before committing them; however, they decided to continue demolishing those 11 buildings, presumably with the assumption that it would not affect the contract and that Pontiac would still make the payments.

How Able Got Into This Mess? Did Able Ignore the Contract Requirements?

Able got into this mess because it moved ahead, demolishing 11 structures without proper approval documentation. However, in my opinion, there is more to it: a combination of inadequate knowledge and understanding of the relevant laws and regulations that could affect the contract, and the possibility of discussions that happened behind the scenes, leading the company to believe that everything was authorized to continue with the demolitions. I encountered something difficult to believe: only a small portion of the buildings did not meet the legal requirements after a project that seemed large, with multiple phases, and with communication that needed to be consistent, was going well. This signals that there were possible discussions of what was occurring, and maybe the verbal authorization was granted, but in contract law, this is not valid and difficult to prove, as there is no legal evidence of a written document explaining the circumstances and actions (Contract, n.d.).

Was Ignorance Able’s Downfall?

If the inadequacy of knowledge was present, it could be determined that there was certain ignorance from Able Demolitions, Inc. But I think there’s a possibility of comfort and disregard because not all the project was affected by the breach, but only 11 buildings. In my opinion, during other discussions outside the formal contract, decisions were made that affected the project in a positive or negative way. Definitely, it would be ignorant to say that the discussions were happening to have an adverse effect on the project; any conclusion or determination taken behind the scenes did not benefit Able, becoming their downfall, as the situation had to be taken to court, and the decision affected the company negatively by resulting in losses after the work was done.

Lessons Learned

The outcome of Able Demolition v. City of Pontiac offers several significant lessons for contractors, municipalities, and professionals involved in service contracts, particularly those involving public entities and demolition work.

• Conditions Precedent Must Be Treated as Mandatory, Not Administrative Formalities

o   A critical lesson from this case is that conditions precedent should be regarded as essential requirements rather than mere procedural formalities. The “Letter to Proceed” served as a crucial contractual gatekeeper for both performance and payment. It is imperative for contractors to understand that failing to satisfy a condition precedent can result in the forfeiture of compensation rights, irrespective of the successful completion of the underlying work (Condition Precedent, n.d.).

• Substantial Performance Does Not Override Clear Contract Language

o   Able Demolition relied on the doctrine of substantial performance, presuming that fulfilling the demolition tasks satisfied the contract's core obligations. However, this situation reinforces that substantial performance cannot remedy failures to comply with explicit and unambiguous contractual provisions, especially those established to safeguard legal rights, public safety, or liability concerns. It is essential for contractors to recognize that courts prioritize the written contract over equitable arguments when the language is clear (Substantial Performance, n.d.-b).

• Verbal Assurances Are Insufficient in Public Contracts

o   Another important lesson derived from this case is that verbal approvals or informal communications lack legal stature, particularly within government contracts. Even in instances of informal discussions or implied authorization, the absence of written documentation proved detrimental to Able’s claims. Contractors should refrain from relying on verbal assurances when the contract stipulates written authorization as a requirement (“What Advice Is Given for a Verbal Promise Made at Purchase?,” 2025).

• Regulatory Knowledge Is a Competitive and Protective Asset

o   This case emphasizes the significance of contract and regulatory literacy, including an understanding of applicable frameworks such as the Federal Acquisition Regulation and state-level public contracting rules. A thorough comprehension of these requirements could have prompted Able Demolition to refrain from proceeding until the necessary approvals were in place, thereby averting financial loss. Proficiency in contract law and regulatory compliance is an essential aspect of effective risk management (A Regulatory Law Definition, n.d.).

• Internal Controls and Documentation Processes Are Essential

o   The financial losses experienced by Able Demolition could likely have been mitigated through the implementation of robust internal compliance controls. This includes mandatory approval checklists, document verification procedures, and stop-work policies when necessary authorizations are lacking. Contractors engaged in multi-phase or large-scale projects should establish systems that prevent work from commencing without the requisite contractual documentation.

• Assumptions and “Comfort” Can Lead to Costly Mistakes

o   Finally, this case illustrates the risks associated with operational complacency. Given that the project was proceeding largely without issue, Able Demolition may have assumed that any deviations would be overlooked or rectified later. This assumption resulted in costs. It is crucial that every phase of a contract is approached with consistent scrutiny, regardless of previous successes or existing relationships(Assumption, n.d.).

References

A Regulatory Law Definition: How It Limits Agency Powers. (n.d.). American Public University. Retrieved January 28, 2026, from https://www.apu.apus.edu/area-of-study/security-and-global-studies/resources/a-regulatory-law-definition-how-it-limits-agency-powers/

Assumption. (n.d.). LII / Legal Information Institute. Retrieved January 28, 2026, from https://www.law.cornell.edu/wex/assumption

B.A.B.L (Hons), G. D. (2023, November 10). BREACH OF CONTRACT. Kanakkupillai Learn. https://www.kanakkupillai.com/learn/breach-of-contract/

Condition precedent. (n.d.). LII / Legal Information Institute. Retrieved January 28, 2026, from https://www.law.cornell.edu/wex/condition_precedent

Contract. (n.d.). LII / Legal Information Institute. Retrieved January 28, 2026, from https://www.law.cornell.edu/wex/contract

cydni. (2015, October 25). Contract Law—Definition, Examples, Cases. Legal Dictionary. https://legaldictionary.net/contract-law/

FAR | Acquisition.GOV. (n.d.). Retrieved January 28, 2026, from https://www.acquisition.gov/browse/index/far

LEGL710: Week 3 - Able Demo. (n.d.). Google Docs. Retrieved January 28, 2026, from https://docs.google.com/document/d/16BAkyWPVWUO0XEXEmNPcxri9TgeYWty5hfT5Yg_KgJE/edit?usp=sharing&usp=embed_facebook

Substantial performance. (n.d.-a). LII / Legal Information Institute. Retrieved January 28, 2026, from https://www.law.cornell.edu/wex/substantial_performance

Substantial performance. (n.d.-b). LII / Legal Information Institute. Retrieved January 28, 2026, from https://www.law.cornell.edu/wex/substantial_performance

What Advice Is Given for a Verbal Promise Made at Purchase? (2025, June 15). LegalClarity. https://legalclarity.org/what-advice-is-given-for-a-verbal-promise-made-at-purchase/