Anybody who has worked in the field of construction knows that disputes are common. Part of the reason for this is that there are many variables in construction projects, and often many parties are involved. Coordinating all construction activities so that things go according to a predetermined plan, ensuring that everybody is on the same boat as the project moves forward, and addressing issues which inevitably arise in the course of the project can be a real challenge.
In any construction dispute, the importance of the contract cannot be underestimated. When disputes arise, the contract is the document which governs how a court will assign liability and damages for breach. Both parties, for this reason, need to be of one mind with regard to the contract. A recent case shows what can happen when they aren’t.
The contract concerned the construction of a log home on a woman’s property in North Carolina, which was terminated before it was completed. While the builder claimed that the woman made no payments on the project up until she abruptly terminated the contract, she claimed that the contract he submitted to the court was incorrect, that the contractor was in material breach of the true contract, and that she had paid him for his work. Ultimately, the contractor ended up prevailing in the case and being awarded $180,540, close to twice the amount of damages he requested. The jury found that he had not been in breach of the contract, so it was a victory for him.
It is important for those who enter into a construction contract to always work with an experienced attorney to craft a well-negotiated agreement so as to reduce the possibility of problems arising. A solid agreement should address things like risk allocation and the scope of work involved, the goals and deadlines of the project, and should include terms that provide a flexible framework for addressing disputes.
The Mount Airy News, “Jury orders homeowner to pay nearly $200,000,” Terri Flagg, September 28, 2016.
American Bar Association, Construction Disputes, Accessed October 10, 2016.