Although dealing with a legal proceeding is never ideal for a construction business, in some cases, it’s necessary. In this five-part article, the attorneys of Cotney Construction Law are discussing common construction disputes that can lead to litigation. As we discussed in the first part of this series, a construction contract is one way to protect your best interests and ensure you are paid promptly for your hard work. In this part, we will discuss a few instances in which a poorly written contract can lead to a payment dispute. For example, if reasonable delays are not featured in the contract or if the owner refuses to pay on time, these issues can lead to a contractor either pursuing a lawsuit or contacting a Knoxville mechanics’ lien law attorney.
In the second part of this article, we discussed how the change order process can require extensions to be made to the scope of work for a project. These requests can lead to disputes if an owner doesn’t agree with the time extension or the pricing for these alterations. This is one example of how project delays can lead to a dispute; however, there are a variety of reasons why a project’s deadline may need to be pushed back, including:
- Inclement weather
- Permitting problems
- Material shortages or late deliveries
- Labor issues
- Safety concerns
Any of these above issues can impact the completion date; however, depending on the construction contract, they may or may not excuse a contractor from reaching their agreed upon deadline. In some cases, if a contractor fails to complete a job on time, they will incur penalties and disputes will escalate. It’s important to have a construction attorney review your contracts to ensure that reasonable delays are featured in the contract. When these provisions aren’t in the contract, this can lead to a dispute between an owner and contractor.
Dealing with Nonpayment
If an owner refuses to pay the contractor at the end of a completed project, the contactor can either pursue litigation or file a mechanic’s lien. Pursuing a lien is a common action to take as a Knoxville construction lien lawyer can file a lien on behalf of a client and ensure that the lien is attached to the property, meaning that the property cannot be sold until the lien is addressed. Nonpayment issues are another reason why contractors should consult a construction attorney to review their contract. Along with contract negotiations, an attorney can ensure that the contract addresses payment requirements, so you are not in a bind at the end of a project and owed a large sum of money.
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.