Understanding Construction Timelines
Deadlines in construction contracts are crucial to the success of any project. They can be the construction of a new building, the completion of a renovation, or anything in between. However, because these deadlines are so well-known and relatively common, people will often forget just how important they truly are.
Every construction project has a schedule. It is up to the contracting parties to determine what that schedule will be. Most contracts will state when work is to begin and when it is to be completed. In some cases, these deadlines are themselves the subject of the contract – i.e. you are contracting for someone to completely construct your home within your parameters.
When the parties agree to the contract, it is presumed that they have agreed to the terms of the contract. While verbal contracts do hold up in some contexts, a written contract, due to its many signatures, tends to have a stronger stance in terms of what the parties agreed to.
In that regard, simple delays can become an issue. When a deadline is missed, both parties are affected. The contractor will have to fill their time and find himself a new contract , while the party contracting for the work will experience delays that could push back the rest of their schedule.
However, missed deadlines can become a large issue. For example, say that a contractor signed a contract to build a house for someone else. However, his obligations as contractor were well known and were accepted, meaning that he had to move out of his old house to complete the construction properly. If he fails to complete construction by the time he has to vacate his old house, then he can effectively lose his home.
This issue can also be of great concern to the party hiring the contractor. While they have contractor in order to work on their house or building, they may live somewhere else entirely. If they are living elsewhere, then they are at the mercy of the contractor. If they cannot add on an extension to their present residence temporarily, then they will have to find another place to stay and pay for their belongings to remain in storage.
In this way, missed deadlines can be a serious issue for both parties.
Legal Justifications for Suing a Contractor
When a contractor fails to complete a job in a reasonable amount of time or in a completed and workmanlike manner, the injured party may be entitled to sue. If a lawsuit is involved, that will mean whatever the extent of the damages, the injured party’s damages will be greater due to the additional expense of attorneys, litigation, court costs, etc. So, it is best if an attorney first drafts what is referred to as a demand letter, in which the injured party sets forth the reasons for the claim and the amounts being claimed from the other party. If that demand letter is not responded to favorably, then a lawsuit may be the next potential avenue of relief. There are various causes of action which can give rise to legal actions against contractors in Virginia. Some of these causes of action include breach of contract, negligence, negligence per se, misrepresentation, and breach of express and implied warranty.
Breach of Contract
If there is a contract establishing time frames, then one can be sued for damages as a result of that breach. The contractor has a duty to perform the work according to the contract and if they fail to do so, they can be sued for performing poorly or taking too long to perform the work.
Negligence
This refers simply to the failure to use ordinary or reasonable care in the performance of construction activities. If a contractor builds a structure in a manner that "malfeasance" occurs, a lawsuit can be brought against him for his failure to perform the work in a reasonably good manner. Negligence on the part of the contractor can also occur when he performs certain work in a negligent manner such that it affects the work of the following trades. For instance, if the drywaller leaves the top edge of the drywall exposed and if that does not permit the painter to paint this exposed edge, it is negligent for the drywaller to leave the board "raw" or "exposed" so the painter cannot paint it properly.
Negligence Per Se
The classic example of negligence per se is when a statute is violated, and that statute is designed to prevent or protect against some particular type of harm in connection with the circumstances. For example, if the pertinent statute determines that certain kinds of support structures are to be used and the contractor uses one which violates that statute, the contractor can be found negligent per se.
Consumer Protection Act
The Virginia Consumer Protection Act allows an individual to file a lawsuit against someone for violations of the Virginia Consumer Protection Act. It provides for certain damages and certain penalties if there are deficient and fraudulent misrepresentations made with regard to the personal residence.
Breach of Express and Implied Warranty
It is generally understood by contractors and all involved parties that there will be an outcome or a product at the end of the construction project. This outcome is the implied warranty, and if the actual outcome falls short of that outcome, a breach of the warranty has occurred.
How to Prove Delays in Court
When a construction dispute becomes a court case, the issue of whether your arguments for proving the case are strong enough to prevail is crucial. This is as simple as synthesizing what happens during a short meeting with the judge: When the questioning is over, the judge may tell you the case will be decided this way, or that way. In most cases, though, the judge will say you will receive an opinion in writing, which will contain the result, the basis of that result and the reasoning behind it.
This typical meeting with the judge is the basis for a court’s decision. In other words, the materials you present at trial, in witness testimony and in written arguments are what the judge uses to reach a conclusion. You need to provide hard facts and evidence that are specific to your project schedule details. The evidence supporting your claims includes information about the progress of work and specific dates when obligations were met or missed. Specific evidence should involve the following:
For clear evidence, charts and timelines that break down the construction progress into easy-to-understand steps of major components of the project, such as:
To prove the contractor delayed performance, you must show you provided the contractor with plenty of notice of these missed dates in previous communications, and that you permitted the contractor more time to re-start the work without delay than was required. For example, if you sent a letter in January 2022 permitting the contractor to re-start work on Feb. 1, you are permitting the contractor to re-start work for 21 days with no blame or claim of delay against it.
Potential Contractor Defenses
In court, contractors may try to defend against allegations of delay by arguing unforeseen circumstances that were outside of their control. An overwhelming storm, a job action by union workers, or problems down the line related to one of the subcontractor’s suppliers could all be among them. It is still the responsibility of the contractor to have foreseen, prepared for and accounted for the delay in cost and time. In many cases, there are things they just could not have foreseen so they are not at fault.
A lack of communication by the client could also be cited as a defense, and even if the plaintiff could provide proof of claims made at the beginning of the project about anticipated delays, the contractor may be able to provide evidence that the delays were actually caused by the client instead.
The problem with many claims is proof. The contractor may be able to demonstrate that the plaintiff could have prevented some of the delays by acting on specific knowledge they had of problems that would hold up the project. In this case, the contractor would not be held liable for delays caused by the plaintiff’s failure to respond or act.
A contractor may argue that the plaintiff was late in the original plans and specs and this is why the work is now delayed. You will need qualified legal help to counter this type of claim, as it can be especially difficult to prove.
If the plaintiff failed to put together a schedule of completion, this could also be cited as the reason why the completion date was missed. A project necessarily includes a timeline of when materials must be ordered and what milestones must be reached even if completion is not 100% guaranteed on that day. The contractor’s schedule must also specify an end date. If the plaintiff didn’t issue that schedule, they cannot demand that the contractor stick to it.
Defenses will vary from contract to contract, but it is important to be aware of the arguments that may be raised so you can act accordingly to preserve your interests.
Possible Remedies for Clients
When a client sues its contractor for delay, a number of different remedies may be sought including the following:
Money Damages
In most delay cases, a client will seek money damages or compensation for its loss which is caused by the contractor’s delay on the project. Establishing the exact amount of lost profits can be difficult, if not impossible. In simple cases, a client’s lost profit damages may be based on unanticipated overhead and anticipated profit for the portion of the work that has yet to be completed. In cases with more complex delay claims, a client’s lost profits may be based on a fact-intensive analysis of the scheduling data and the cost of completing the work.
Apart from lost profits, a client may also seek other categories of money damages such as:
Termination
In construction projects , it is not uncommon for a client to terminate a contractor’s contract for default. In cases of delay, a client may elect to terminate a contractor for failing to achieve contractual schedule milestones. Like a client’s claim for monetary damages, a client’s decision to terminate a contractor is based on the law applying to a specific type of contract. Most contracts allow a client to terminate a contractor for breach or default. In some cases, a client may choose to exercise its right to terminate regardless of whether the contractor is in fact in default. For example, if a client is in financial distress with its own lender and unable to pay a contractor, it may conclude termination of the contract is necessary.
The Use of Arbitration and Mediation
An alternative to filing a lawsuit is arbitration. Arbitration is a much more informal process than litigation. In general, there are fewer rules that apply, and the process is much less rigid. The parties typically agree to an arbitrator who will hear the facts of the case. An arbitrator may be an expert in a particular industry who has experience in the construction industry. The arbitrator will hear a presentation from each party, including presentation of witnesses, closing arguments, and will issue a decision in accordance with the law. In some cases, the decision of the arbitrator is enforced just like a judgment. Sometimes there is a right to appeal the decision of the arbitrator, but it may be limited to technical arguments, such as the arbitrator not following the rules or misunderleading the law. It is much less likely that an appeal will be heard because a court does not agree with the result of the arbitration.
One advantage of arbitrating a claim is that it is generally less expensive in the long run than litigation, especially for a contractor dispute. The process is more informal and the hearing before the arbitrator may be much shorter than a full-blown trial of a matter. Arbitration is also a quicker way to resolve a matter than a case going to trial and being appealed.
Mediation is another way to possibly resolve a case without going to court, or to at least narrow issues in a case where the lawsuit must go forward. Mediation is an alternative dispute resolution (ADR) mechanism that has become very popular over the past couple of decades. A mediator will listen to both sides and try to guide the parties to a resolution. A mediator does not decide the matter. The mediator will meet with the parties separately and together to negotiate the case. If the case cannot be resolved at a mediation, the case will likely go to trial, or the lawsuit will be dismissed and the parties will have to go through the court system to resolve the matter.
Steps to Prevent Issues Before Engaging Contractors
Before hiring a contractor or subcontractor, homeowners and other clients should take certain preventive measures to help prevent a potential costly litigation over a contractor’s delay. Among other things, clients should insist on attaching liquidated damages provisions in their contracts with contractors or subcontractors who are going to be performing work for them. If the contract does not contain a provision in which the contractor specifically agrees to pay for damages caused him because of a delay in the completion of his work, then the client will not be entitled to recover money from the contractor.
Clients should also carefully review the scope of work to be performed by the contractor and make sure that the contract specifically and clearly sets forth the manner and frequencies in which the contractor will be making weekly or monthly progress billing for the work performed. Under numerous contracts I have seen from clients , there is very little description of what the payment provision in the contract actually means. The contract typically states, "Contractor shall be paid monthly progress billing until the work is finished." If the contractor does not perform his work in a timely manner resulting in a delay, the client will not be able to short-pay the contractor for the damages suffered as a result of his breach.
Another important measure homeowners and other clients should take to prevent delays in any construction project is to adequately screen the contractors by checking their reputation in the community. I strongly encourage clients to thoroughly check the public websites of your State Licensing Board of Contractors and/or your State Attorney General to see whether the contractor has any complaints pending against it. Also, you should thoroughly check the references provided by the contractor in your interview process for the project. It is absolutely vital to hire contractors and subcontractors that are reputable and have positive feedback from other clients.