Your Legal Entitlements
As alluded to above, you don’t always need to sue a contractor – in fact, lawsuits should only come as a last resort when you’re out of other options to force the contractor to honor the contract or fix the problem. But it helps to know what legal rights you have under the law to force the issue. Among other legal principles, the law expects that contracts are binding in nature, including contracts made between contractors and clients. If there is a problem with execution of the contract, then you have a case to sue for damages. However , the context of the contract is also important to consider.
Contract law requires contracts to include certain basic parameters to be considered legally actionable. Write down the terms of the contract and keep that paper at home. Then check your premises after work has been completed to look for problems with the work. If you can show that the contractor has either violated the terms of the contract or the work was done poorly in the eyes of the law, then you can sue them to recover damages.
Gathering Evidence of Defective Work
The next step is to start collecting evidence that there has been poor workmanship by the contractor. Once you have determined that the scope of work in your contract has been breached, and you decide to proceed with taking action against the contractor, it is important to gather evidence as soon as possible. Take photos of the areas of concern, including any mold or water damage. It is a good idea to keep a written log of each attempted repair made by the contractor. If you need to hire another contractor to do the work you have requested it is important to keep track of these records so that the new contractor can estimate and provide a bid for the repairs. It is also valuable to have a receipt from the new contractor showing how much they were paid for the repairs. You should keep any written communications you have with the contractor. Much of your communications may be verbal, so if at all possible, it is best to communicate in writing with the contractor. Whenever the contractor is at your property, take detailed notes of what was discussed, and what work was done. If the contractor tells you they will be back the next day to complete work, but then do not return, write down exactly what the contractor said and who was present when they made such statements. Save any receipts you have paid to the contractor. This includes receipts for subcontractor work, or for materials purchased by the contractor. Saving these types of records is important in showing the court the unpaid invoices your contractor has incurred. If you award a judgement against your contractor you will often receive the full amount they owe and not a penny more.
Evaluating the Contract Terms
Once you have identified the problem and brought it to the contractor’s attention, it’s time to take a closer look at the contract. Thoroughly examine the terms to see if any specific provisions impose a legal duty and have been breached by the contractor. There are several key clauses to consider.
The first is the scope of work section of the agreement. Carefully review this section to determine if the contractor fully performed its obligations by completing the work according to the specifications. Sometimes the contractor will change its methods after the project has commenced, or alter the phrasing of a phase in order to cut corners. The contract’s scope of work governs what services the contractor must provide, irrespective of any verbal changes that may have been made.
If the contract with the defaulting contractor is vague or ambiguous, it will most likely prove meaningless in any court room. This is because a term that is not clearly defined is generally deemed waived and will favor the aggrieved party. Hiring an experienced construction lawyer will help you shape the language of a contract so that there can be no dispute about what was expected and what went wrong.
Once you’ve examined the specific terms of the contract, check on another important clause – the schedule. Was the project completed on time? If not, your contractor may be in breach of its agreement. It may not allow for remedies that lead to automatic financial compensation, however. Be sure to speak with your construction lawyer about this.
Engaging Legal Counsel
In both small and large cases, it’s always beneficial to consult with a lawyer or law firm who specializes in construction law. An attorney experienced in such matters can help you evaluate whether or not you have a strong case, and whether it is worth pursuing. In addition to this, a lawyer can help you navigate the legal proceedings that follow. Dealing with a contractor or a subcontractor on your own can sometimes be more trouble than it is worth, and this is all the more so when there is a lot of money at stake. A construction lawyer can investigate the project and make an informed decision whether litigation is your best strategy for recovering any funds lost.
Aiming to Resolve Issues Morally
If addressing the problem directly with the contractor does not result in a resolution, you may want to consider mediation services. Mediation is a form of alternative dispute resolution, where you meet with the contractor and a neutral third-party mediator to discuss your grievances with the job. There are several experiences the mediator can create between you and the contractor . It is important that the mediator is not [insert state]-specific, as you are interested in your rights, which have been set forth in the contract, not arbitrary rules the court may follow. The mediator can:
The mediator will often encourage both parties to cooperate in seeking a settlement. That means that the mediator may take a more active hand in helping you and the contractor negotiate. While the mediator may offer any expertise on the matter, the mediator may not announce a decision; rather, the parties must come to an agreement.
Bringing a Lawsuit Against the Contractor
After the contractor has refused to fulfill their obligations under the original contract, you can choose to file a lawsuit in court against them. Like most breaches of contract cases, you only need to prove that you and the contractor reached an agreement and that the contractor did not live up to that agreement. You will be required to pay filing fees when you submit the necessary legal documents to court. The clerk at the courthouse will also expect you to submit the required number of copies of the documents.
The court is going to need copies of important documents such as:
The checks or other payments you made to the contractor.
All correspondence between you and the contractor.
Any work receipts that the contractor failed to provide you with.
A copy of any checks you received from the contractor.
Proof that you had the property inspected by an independent professional to verify the claim of poor workmanship against the contractor.
Photographs of the damage.
You must be sure to include copies of these documents with your submitted paperwork for the lawsuit.
There is no guarantee that the contractor will honor the judgment, and you still may have to engage in further legal action to have the court enforce the judgment, but many parties are willing to fulfill their obligations at that point.
Exploring Alternative Resolvers
For many, arbitration offers a way to cut through the legal process’s customary layers of complexity, cost, time, and inconvenience. In arbitration, the parties and the arbitrator or panel conduct their own discovery, attempt to reach an amicable settlement before hearing, and submit their dispute to a neutral third party for final determination. The arbitrator(s) make a final judgment, which is generally not subject to appeal or review by a court. However, this is only the case in non-consumer disputes; consumer construction contracts typically allow for appeals in arbitrations.
Mediation is an even more informal alternative to filing a lawsuit. Mediation utilizes a neutral third-party to facilitate the discussion during a dispute. The mediator may be a retired judge or an experienced attorney, but he or she does not in fact decide the outcome of the case. The purpose of the mediator is to help the parties work toward a settlement. When mediation is successful parties have the option to file a consent judgment to incorporate the settlement agreement into a court order, or they may enter into a private settlement agreement that is not incorporated into the court order. While mediation is not binding, if the parties have included a mediation clause in their contract, then they may be required to mediate before filing a lawsuit.
An often-overlooked option is to pose the question of legal options to the Division of Consumer Affairs in your state’s Department of Consumer Protection. Every state has some type of public complaint agency that can help consumers negotiate settlements. In most states, almost all consumer complaints are referred to the Attorney General’s office, which will then investigate the matter and determine whether to pursue it. In referring the matter to the Attorney General’s office, the consumer may have assisted in a larger consumer protection investigation.
Discerning Prospective Results
If you do win your lawsuit against a contractor for substandard work, the "damages" you can win from the contractor in money damages are limited to either the cost of the repairs or the diminution in value of the property, unless you have the ability to prove special damages.
There are two basic types of damage recover in these cases, direct damages and consequential damages. Direct damages are generally limited to the cost of repairing the defective work or the difference in value of the work as contracted and the work as completed.
Example: if you contracted for a roof and the roofing company put on a roof made of a material that is more expensive but is not a substantial improvement over the agreed material, you may not be able to recover the added cost of the fancy roof. You may be able to recover the cost of that roof if you can prove that it was a "substantial improvement". If you contracted for a garage door and they put on a door that is almost as good but has a chip in the bottom section which cannot be repaired, you have a money damage claim for the cost of a replacement door. In many circumstances the type of damage you sustained would be a repair you would have to make anyway. Not the case if you were promised to have the garage door painted in your contract, and they never painted it and you only hired them to do that work. You may lose the value of your house without a painted garage door, especially in a homeowner’s association. The damaged caused by the contractor’s failure to follow the contract will be the reasonable cost of having the work performed by another contractor or paying to have the work redone to conform to the contract. In many cases direct damages will be unpaid expenses incurred by a homeowner to have work redone to meet your contract requirements.
A consequential damage , such as a leak from the commercially installed skylight that resulted in water damage to your hardwood floor, that you can prove caused the leak and caused you to have to replace your wooden floors, will need to be verified by the cost of your new floor replacing the damaged floor with the competent proof of the contractor to support your damages.
Sometimes the contract is terminated before the work is complete, and the owner has caused the termination. This may give rise to a claim to collect for damages to the other party’s interest in the property and lost profits. Or the contractor abandons the project and causes the damages to be incurred. These damages would typically be recovered in a lawsuit for breach of contract.
Sometimes homeowners believe that they will pay for improvements now and be reimbursed as part of a lawsuit against the contractor later. Not so. The cost of the lawyer’s fees, contractors costs to pursue the case, estimates, deposition costs, and time in court are all costs that the homeowner must bear. You have to pay out up front, unless the financial costs can be recovered from the contractor as part of the lawsuit and if that does happen, the goal would be for costs and fees to be recouped as part of the final settlement of the case with all damages or as part of a judgement against the contractor.
Sometimes the owner is found to be the proximate cause of the breach of contract, or some third party is found to be the cause of the defect, and the whole case goes away quickly or is dismissed before trial. The ultimate issue comes down to whether the breached contractor performed per the contract.
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