Thousands of Americans
hire general contractors to build or renovate their homes every year. While any
differences that arise can often be worked out between the parties, sometimes a
real conflict arises between a construction contractor and a home owner. In such situations,
what right does a homeowner have to seek redress in the court system? Whether
or not a homeowner can resort to legal recourse is dependent on the situation.
As almost every arrangement between a contractor and
homeowner is subject to written construction contract forms, a homeowner’s most likely legal
option is to sue the contractor for a construction contract breach. In order to be
successful, a homeowner must prove the following:
- A valid, voluntary, and binding contract
for construction work existed between the parties;
- The contractor, through no fault of the
homeowner, materially breached the construction contract; and
- The contractor’s breach of the contract
led the homeowner to incur damages for which the contractor should be liable.
Damages to Recover
It is essential to understand
the difference between these two types of damages:
damages are those which stem directly from the contractors
breach of contract, such as the cost of repairing shoddy work or the cost of
having the construction completed by a different contractor.
damages are those that are less-directly connected to the
contractor’s actions, but encompass what the homeowner should have been able to
reasonably expect had the contractor completed the construction satisfactorily,
such as loss of rental income or higher financing expenses.
Tips on Drafting a Contract Agreement
- Drafting a Contract
that Protects the Homeowner : There are several
clauses that homeowners should ensure are included in their construction
contract agreement in order to maximize their chances of recovering damages in a case of
breach of contract. Some of these clauses are:
Damages Clause: Such a clause assesses a monetary
penalty against the contractor for each day that the contract is not completed.
This can help monetize consequential damages in case of a breach of contract.
is of the essence” Clause: This clause allows a homeowner to recover
damages, provided the property owner can demonstrate an accurate calculation of
consequential damages, such as the loss of rental income.
Clauses: Generally, a clause that mandates that the parties
submit to arbitration in the case of a conflict is not in the best interests of
the homeowner. If a contractor insists on putting an arbitration clause in the
construction contract, the homeowner should seek to use an agreed-upon,
Legal Help from a Contract Dispute Attorney
If you have been the victim of shoddy workmanship you should seek out a
competent contract attorney to advise you of your rights. Don’t assume that you
have no legal recourse based on the language of the contract, as contracts that
allow a homeowner no right to recovery in cases of breach of contract may be
held invalid by the court as unconscionable or against public policy. Hiring a lawyer can prove invaluable to your construction law cases. Gather your contract for constrution and contact a construction law attorney to help you with your case.