Perhaps one of the most stressful things in life, home-building, and construction can cause many disputes and arguments between the homeowners and the contractors. From delays to budgets, to unforeseen issues, to design changes, to everything in between, construction is a process that you must prepare for. Entering into an agreement at the beginning of the project is extremely important, but you should also be prepared for some surprises to appear. If, for some reason, you feel as though the surprises or other issues that pop up during the project are unreasonable, what can you do to fix it? Can you sue the contractor? Let’s find out.
Can I Sue a Contractor For Unreasonable Delays?
When something happens in the middle of construction that causes a delay, the homeowner and contractor will likely disagree on who is responsible for it. In this situation, a civil case may arise where one party seeks compensation from the other. So, yes, you can sue a contractor for unreasonable delays; however, it’s not always that easy.
In order to resolve a dispute, the contract that was signed at the beginning of the project, as well as the contractor’s rights and the homeowner’s rights, will all be considered in the decision of awarding damages. Construction projects often run into delays for a number of reasons, what will be up for debate is the “unreasonableness” of the delays.
Construction Contract Types
When it comes to legal disputes, contracts are king. In most civil lawsuits, the signed contract agreement will be the indicator for deciding which party is responsible for damages. So, when you’re getting ready to hire a contractor for your next home project, what should be included in your contract?
A construction contract will lay out the details and expectations for the project, making sure that all parties are in agreement before any work begins. This agreement is designed to protect both parties should any disputes arise. The contract will outline, in detail, the parameters of the entire construction project.
There are four types of construction contracts:
1. Fixed Price: the costs of the entire project are rolled into a lump sum/fixed price and the client is only responsible for paying the set price outlined in the contract.
2. Unit Pricing: in this type of contract, the price of the project is broken down into measurable units, typically done by the tasks or scope of work and materials needed to complete the work.
3. Cost-Plus: the client will be responsible for paying for all of the costs associated with the project including labor and materials; they will also pay an additional fee to cover the contractor’s overhead and profit.
4. Time and Materials: an hourly or daily rate is set for the contractor and the clients agree to pay for any additional costs that may come up throughout the project, classified as direct, markup, or overhead.
Any of these contract types will protect both the contractor and the homeowner and choosing which one to use will be up to both parties.
Information That Should Be Included in Your Construction Contract
What should be included in your construction contract? No matter which type of construction contract was agreed upon, there are certain types of information that you should include.
- Identifying Information: name, business name, phone, address, email, etc. for both the contractor and the homeowner should be included, as well as license numbers and insurance information from the contractor.
- Description of the Project: the scope of the project should be outlined in detail in your contract, “demo the kitchen cabinets, replace flooring, painting cabinets, installing tile and appliances, etc.”
- Timeline and Completion Date: a clear project timeline should be agreed upon prior to work beginning, the contract should state: when the contract takes effect, the project start date, estimated completion date, and clear verbiage explaining what will happen if the work can’t be completed on time.
- Cost and Payment: deposit, total project cost, payment schedule, fees, and incentives should all be outlined in this section
- Stop-Work and Stop Payment Clause: each side is given the right to stop paying if milestones have not been reached in time or payment has not been received in time.
- Change Order Agreements: design changes in the middle of the project or changes of scope may occur due to unforeseen elements, this section allows either party to deviate or add to the original contract
Once all of this information has been outlined in as much detail as can be expected, both parties will sign and the contractual agreement becomes the foundation for the project.
Rights of the Contractor Explained
Just as you, the homeowner, have rights, so does your contractor. It is important to remember when/if a dispute arises, that you chose this contractor to complete the project for a reason, likely because you like their work and trust the quality of it.
When determining who is responsible for unreasonable delays, it is important to remember each party’s rights. The contractor may remain blameless for excusable delays, such as delays that are unforeseeable because of acts of nature, or other delays that could not have been expected and are not the contractor’s fault.
Just as you are able to bring forth a lawsuit to your contractor, they are also able to bring forth a lawsuit against you. Typically this will be to ensure fair payment for service, other times it will be because they need additional time to finish the project due to inexcusable delays that the owner causes. Problems that arise during the project that are out of the contractor’s hands include lack of materials from an outside source that promised a certain date of shipment, and whether or other natural disasters that couldn’t be planned for.
Rights of the Homeowner Explained
The rights of the homeowner within a project may lead to them receiving damages when the contractor is at fault for delays in not completing the project at a specified and agreed-upon date. If the contractor has given the homeowner a fixed price for the project and agrees to responsibility if delays occur, then the contractor is liable for additional costs and for completing the project on time.
If your contractor has caused nonexcusable delays or ones in which he or she is at fault, then the homeowner may take the compensation for the time out of the end of the paycheck. The key to this legal right will be what is deemed “inexcusable” – which will fall under the judge’s discretion, or what was outlined in the contract.
Construction Delay Disputes and Solutions
Whenever a dispute occurs, the contractor and homeowner should work to resolve the issue themselves. If this is not possible, bringing in another authority such as a lawyer can help determine if a compromise or solution can be reached. If the dispute must go to court, each party should hire a lawyer to argue the case and/or help reach a settlement.
Sometimes, construction disputes are easily solved due to the contract that was signed at the beginning of the project. However, in certain cases, the disagreement can turn ugly and a court case is required. When this happens, the court will decide whether to uphold the contract or throw it out based on enforceability and/or strength of certain damages/payment clauses.
If you decide to sue your contractor for unreasonable delays, work with your lawyer beforehand to determine if your argument will hold up in court. You will likely need to provide evidence that proves the delays were unreasonable and the fault of the contractor. If your lawyer decides that your case may have merit, but is not strong enough to be proven in court, they may suggest arbitration or settlement outside of court.
Hopefully, your construction project goes smoothly, without any unforeseen issues and you do not need to resort to lawsuits. But, if a dispute arises, use this article to help you determine the next steps to resolve the issue.
How Much Will it Cost to Pursue a Lawsuit Against My Contractor?
If you have taken the necessary steps to avoid a lawsuit in court against your contractor for unreasonable delays in the project and they did not bring about a solution, you will need to hire an attorney. Depending on a variety of factors, this can cost you anywhere from a few hundred dollars to a couple thousand.
The cost of hiring an attorney should be considered before bringing the case to court. Start by reminding your contractor, firmly, about your expectations for the project. If nothing changes, put it into writing, setting forth what was promised and what is actually occurring. Still, nothing has been resolved? Then weigh whether the costs for an attorney will bring about the compensation and results you desire. In small claims court, there may be a limit to the damages that can be awarded to you, and your lawyer fees may break even or cost more than what you will get in court. Additionally, the result of the case cannot force the contractor to actually finish the work they started.
So, while the answer is yes, you can sue your contractor for unreasonable delays, it may not be as simple as that.