COVID-19 AND THE CONSTRUCTION INDUSTRY

Here's How You Can Protect Your Business
Phone

Most Common Causes for Litigation in Construction Law

Any company involved in construction faces a reasonable chance of being involved in litigation. The amount of money at stake in construction projects often means that anyone involved is likely to take legal action to protect their investment. While being involved in litigation is not necessarily a problem for a construction company, your company does need to be prepared for possible litigation. 

Consequently, anyone who is engaged in a construction dispute may find that they need representation by an experienced construction litigation lawyer who has experience in winning these types of cases. It’s vital that anyone engaging in a dispute with a building owner or builder take the time to understand the most common causes for litigation in construction law. In this article, a Colorado Springs contractor lawyer discusses the common causes of litigation in construction law. 

Payment Disputes

One of the most common causes for litigation in construction law is when a contractor fails to pay the workers for their work, and then the employer takes them to court. In many states, this type of law is known as “prima facie” law because it’s the biggest legal issue that ultimately decides the case. For example, a case where someone who was improperly paid for carpentry work sued his employer under the federal Fair Labor Standards Act, which aims to protect workers from being paid less than they’re entitled to for doing the hard work, would be considered “prima facie.” The problem is that most of these cases end up being “contingency” cases, meaning that the employer simply needs to show that it was reasonably foreseeable that the contractor would fail to pay the workers. In other words, the employer has to prove that the workers lost their opportunity for a fair settlement because of the contractor’s refusal to pay.

Related: Mitigating Construction Payment Disputes

Negligence or Misconduct

Another one of the most common causes for litigation in construction law is negligence or willful misconduct on the part of a contractor. If a contractor deliberately makes promises that are not fulfilled, such as promises to complete the job by a certain date, this can lead to a lawsuit in construction law. The reason that construction litigation lawyers try these cases is that often the only way that the contractors can avoid having to go to court is if they negotiate with the owners to settle the matter out of court. Negotiating usually leads to an agreement that prevents litigation for both parties.

Related: Defending Against Negligence and Defective Construction Claims

Contract Errors or Omissions

Contract errors or omissions are a common cause of litigation as well that arise when construction work is done less than correctly, causing damage to property and harm to the injured party’s reputation. One of the most common reasons for contract errors and omissions is subcontracting, which occurs when one party is hired to perform work that was already contracted out by another party. Another common cause of construction disputes is the failure of a contractor to communicate vital information to the party hiring. This type of mistake can result in injuries, unnecessary delays, property damage, and other problems. Other common causes for construction disputes include poor site conditions, crane problems, utility hook ups, underpayment or other errors and omissions, poor communication between contractors and subcontractors, and workers’ compensation claims.

Related: Understanding Contract Errors or Omissions in Construction Contracts

Differing Site Conditions

Before a project starts, the area is surveyed to ensure that the construction plans can be completed. Differing site conditions happen when the conditions in the worksite are different from what they were supposed to be. This can cause severe delays, require changes to plans, and can massively increase costs. Fortunately, the construction company can take legal action because the information that it was given was inaccurate and is, thus, the source of these problems. 

Contract Noncompliance

Contractors and project managers can be held responsible for any form of contractual activity, from poor performance to failure to perform as expected. As a result of one contractor’s noncompliance with applicable laws, another may be held in default of the contract, and, in the case of a large-scale project, the loss of revenue could result. To ensure that all parties understand the legal ramifications and consequences of contract noncompliance, it’s important to familiarize yourself with common causes of construction litigation. Although it can be costly and frustrating for the parties involved, it’s absolutely necessary for both sides to fully understand their rights and responsibilities in the construction field.

Litigation can become a serious problem for a construction company if basic steps are not taken to protect the company. The chances of being involved in construction litigation are enough that every company should take steps to both avoid and prepare for possible litigation. Your construction company can benefit from working with Colorado Springs contractor lawyers. If you have questions about the kinds of software and documentation you may need, contact one of the Colorado Springs construction attorneys from Cotney Construction Law.

If you would like to speak with a Colorado Springs construction dispute attorney, please contact us today.

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.