Overview of Contractor Disputes
Following are some common disputes that exist between contractors and those who hire them. Some of the disputes can be avoided by having proper contracts in place. Unfortunately many people hire contractors without contracts. Without a contract, all deals are verbal and can create future headaches in the form of disputes. Even with a contract, disputes may exist. Following are some common disputes advertisers and consumer affairs programs receive complaints about on a daily basis:
- (1) Breach of a Contract- A breach of agreement occurs when one party does not fulfill their duties as agreed to in the contract.
- (2) Delay- Delays typically occur when a project is already underway or nearing completion and the contractor is unable to fulfill his responsibilities as agreed to or promised in the contract. Some delays may lead to further legal action such as breach of contract.
- (3) Substandard Work- Sometimes the work done does not conform to the contract or building codes. The work is not completed to the standard that the customer was contracted to perform. For instance , sometimes the contractor fails to make repairs to a structure after water damage occurs when he was contracted to do so. This will require contract claims to recover the failed obligation and expenses incurred.
- (4) Payment Issues- Sometimes contractors will not be paid as agreed upon in the contract. This can fall under the breach of contract category or simply a situation where the contractor agreed to be paid a certain amount, but is either paid less, never paid or underpaid for his work.
Function of an Attorney
Attorneys play a critical role in the resolution of contractor disputes. An attorney can assist in the negotiation of a settlement, draft necessary documents, and if the dispute ends up in litigation, represent a client during the court proceedings.
An attorney may help negotiate a settlement by drafting or reviewing a contract to ensure that any disputes that may arise in the future are easily resolved. Alternatively, an attorney can remedy the dispute by communicating directly with the other party. Generally, in the construction industry there are other parties that may be liable such as subcontractors, suppliers, architects, or engineers: a knowledgeable attorney can identify those parties that may need to be included in the discussion. An attorney will communicate any claims that are available or may be available to the client and other parties. There are statutory requirements that need to be complied with and deadlines associated with those claims, and therefore the sooner an attorney is consulted, the better. An early intervention can prevent disputes from escalating and can save a great deal of time and expense.
If communication with the adverse party fails to lead to a resolution of the dispute, an attorney can then draft the necessary legal documents to initiate litigation or prepare the dispute for arbitration. Some claims arising out of a contractor dispute are subject to a pre-suit or pre-arbitration notice period and require that certain information be communicated to the adverse party prior to the filing of a lawsuit or commencing an arbitration. An experienced attorney will be familiar with the time limitations and the cases that support the enforcement of notices and the preclusion of claims for failure to comply with those notice requirements.
Timing of Retaining an Attorney
Negotiations have failed – At the outset, I believe that a contractor should keep as much of a cordial atmosphere with the property owner as possible in order to reach some sort of resolution. However, if you have negotiated on your own for a significant period of time only to reach an impasse with the property owner, you may want to consider hiring an attorney.
A lawsuit is imminent – If the property owner has, in writing, made it clear they intend to sue you for some large amount, it is probably time to hire an attorney. It is important to note that an attorney can be retained under a contingency fee basis. In other words, you may not be required to pay your attorney up front, but only out of the money you receive at the end of the case. This may be a good option if the property owner has a lawsuit pending against you and has already hired an attorney.
The damages you have suffered are significant – If your company has suffered a serious financial loss as a result of another person or entity’s conduct, it is likely your best interest to hire an attorney to explore your options. Cases in which substantial damages have been suffered may lead to a settlement or generate substantial attorney’s fees award if liability is found, so it may not be the financial burden you expect to involve an attorney.
Selecting a Retainer Attorney
An invaluable resource for any construction project is a qualified attorney; an attorney that understands the complexities and nuances of construction contracts, law and procedures. If litigation becomes necessary, the general experience attorney will typically not have the knowledge and experience necessary to represent the client.
Finding a qualified attorney specializing in construction law may prove to be difficult. This is due to the fact that many attorneys claiming to be construction attorneys are in fact not. Most attorneys simply dabbles in construction law claims or occasionally handles a few claims here and there. Sometimes these attorneys actually draft a complaint for a breach of contract claim, but in most instances, they rely on the skills and abilities of the construction expert or attorney that has been hired by their client as that construction experts or lawyer is usually the one prosecuting the legal claim or defense .
Some of the criteria that the public should be looking for to select a qualified attorney to handle a construction law dispute are:
· The number of construction law cases actually handled by the attorney or law firm.
· How successful the attorney has been with their construction law matters.
· The number of favorable opinions and rulings a particular attorney or firm has obtained regarding construction disputes.
· Does the attorney or law firm specialize in construction law and only handles construction disputes at the time the person retained seeks to hire an attorney to handle a construction law case.
· What type of construction projects does the lawyer handle?
Legal Actions for Contractor Disputes
Attorneys have a toolbox of legal strategies that they use to tackle contractor disputes, and the resolution process can vary from case to case. However, there are some common approaches that they will consider:
Mediation
Mediation is an appropriate approach in most cases. It’s a non-binding method of alternative dispute resolution. Mediation allows the parties to go through a settlement process in advance of a potential trial.
A third-party mediator is involved, and the parties work with him or her to find common ground of their own. The mediator cannot force a decision on either party—it is not a litigation process—but it can help resolve a case at the negotiation stage. Some courts even require mediation as a first step in the legal process.
Arbitration
Arbitration is another possible route to resolution. Parties mutually agree up front to allow a third-party arbitrator to make the decision on their behalf. This is done in lieu of a jury trial. Arbitration is considered binding, meaning that the decision is final and implementation is required by both parties.
The outcome can be decided by either a single arbitrator or a panel of arbitrators. The parties to the disagreement choose either path. The arbitrator(s) may be non-lawyers, but may also be attorneys with expertise in your line of disagreement.
Litigation
Litigation is what most people think of when it comes to lawyer-client relationships, and although it is the last resort, it is often the best option for a contractor dispute. Sometimes it is the only route that will be acceptable to all parties involved.
The result in litigation is binding, and the decision must be honored. The attorney that represents you will be very familiar with the case and the evidence going into the jury’s decision making process.
Lawyers are not miracle workers, although they perform miracles every day, or else they wouldn’t win cases as frequently. So, understand that there is no single "sure-fire" way to handle contractor disputes. That said, a talented attorney will know the strategies that are appropriate for your contractor’s case.
If you would like to know more about reaching the right resolution for your case, contact the construction lawyers at Spagnoletti & Co.. Our legal team will guide you through mediation, arbitration, or litigation as needed. We have extensive experience representing clients in construction disputes.
Preparing for Your Attorney’s Office Visit
If you have already been interviewed by other attorneys, or otherwise received some minimal amount of legal advice, it is not uncommon to arrive at your consultation with an attorney before doing substantial homework on your own case. Did the homeowners or your contractor give you a contract? What does it say? Did they give you a guarantee of their work? What does it say? Have you paid them? Has the work product been delivered? Have you received any type of credit? Did you ever file a complaint with the Division of Consumer Affairs? Are there administrative regulations that apply to your situation? Are you eligible for any sort of monetary award , and how is it determined? Are there any statutes of limitations or claims bars that apply to your situation? Have you kept any documentation regarding the matter in question? Do you have any pictures (if it is a construction issue)? If it is not a construction issue, are there any other documents that support your position? Were there any witnesses? Do you have names and contact numbers for people who could support your position? If you have a claim for money only, it is important to articulate what remedy you desire. Are you seeking just the return of money lost? Are you seeking the cost of repairs? Are you going to help facilitate the repairs and seek the money it will cost? Are you asking for additional damages? Are you asking for legal fees and costs?