Contracts are largely seen as being infallible and unbreakable, at least without causing some type of serious punishment or penalty. However, contracts are not always as strong as they appear. In this article, a Greensboro mechanics lien lawyer discusses the possibility of a construction contract being invalidated.
Related: Why a Contract May Be Invalid
Mistakes in Signing Construction Contracts
Many people get into contractual agreements without reading the fine print. They tend to rush into things without understanding all the terms and conditions in the contract, which leads to disputes later on. This is why construction contracts should be looked over before signing.
Before you sign any construction contract, it’s recommended that you read the entire document and look for any hidden clauses that may affect your future legal position. You should also know all the details of the project, including the amount that you will be paying and the date that the contract is set to end. Fully understanding the contract is the best way to control whether or not the contract will be invalidated.
Reasons to Invalidate a Construction Contract
There are many ways to invalidate a construction contract. One of the most common methods is making unrealistic demands on the contractor. If your client wants the work done fast and at a low cost, they might want the contractor to finish as soon as possible or even give them a cheap deal because he thinks he can get away with it. Most construction contracts do not allow contractors to give such deals because it might affect their future business dealings.
Invalid contracts can also arise when looking at the scope of the project. If the scope of work is not well-defined, then that means that it could inflate indefinitely. This can quickly lead to one or more parties invalidating the contract because the terms are very unrealistic. Make sure that any expectations are clearly defined in the construction contract. This is because the scope of the work is what you will be paid for. If there is no contract proposal in place, this is a surefire way to invalidate the contract.
Not doing the project right the first time can also lead to an invalid project contract. Sometimes, you may not get all of the details right when you’re doing a big renovation or building project. It takes several weeks and even months before you can actually see some results of your efforts. If you do the project in the wrong way, you may be stuck with re-doing the project or invalidating the project contract.
There are other things that you can do to invalidate a construction contract as well. The most common way is to ask for extensions to the construction contract once you’re halfway through. If you can show that the amount of time allotted for you to complete the job is being lengthened, you can get your own company to pay for the entire gap. You should always make sure that the contract includes provisions for such an extension, though. That way, there won’t be any problems later on.
Lack of Clarity of Responsibilities
There are two parties to a construction contract: the property owner and the contractor. Beyond the construction law aspects of these transactions, there is the question of damages and compensation (or breach of warranty) at the end of the day. Without an accurate understanding of what the proper parties are entitled to when one party defaults or does not deliver work, how to go about disputing an award becomes difficult. This is where an experienced Greensboro contractor lawyer can make a real difference. While you cannot prepare yourself with the knowledge of how to negotiate properly in the face of an unfavorable provision, with an attorney on your side, you should be able to at least have the facts in hand before you enter into a contractual agreement.
Related: Unenforceable Contracts
The construction contracts in most jurisdictions require the contractors to include a severability clause usually involving negligence, breach of warranty, or breach of contract. Severability clauses state that should one part of the agreement be deemed illegal, the other parties must bear the costs of performing work that is illegal, as well. In the case of construction contracts, this means that if a subcontractor fails to complete the work or carry out any part of it, then the entire contract is voided, and the company is not legally responsible for the cost of the remaining portion of the project.
Not All Contracts are Binding
You’ve probably heard that construction contracts are enforceable and legally binding. This is not entirely the truth. While a construction contract is legally binding, most often, construction law only requires contractors to deliver work on time with enough lead time to get various documents reviewed and respond to any disputes that may arise. Most construction contracts, therefore, are suited for contractors looking to maximize profits without spending a lot of time and money dealing with disputes as they arise. Contact a Greensboro bid protest attorney to learn more about your options for dealing with disputes.
Dealing with legal issues, such as contracts, can be difficult without serious legal issues. When construction contracts are involved, your company may need the help of an attorney. If you have questions about contracts, contact a Greensboro contractor lawyer from Cotney Construction Law.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.