When an owner of property and a contractor engage in a construction contract, disputes may arise, especially if the contractor engages in construction fraud. Ways to resolve the dispute are usually defined by the terms of the construction contract, which outlines the obligations and duties of the contractor and the owner of the property. Most importantly, the construction contract will typically provide for remedies if one of the parties does not perform as promised.
Construction projects often experience delays. There are commonly unexpected situations and circumstances out of both the contractor’s and owner’s control. The question that arises when a construction project has been delayed is whether the owner can recover from the contractor for the delay.
Construction contract provisions often outline specific cases where the contractor is excused for delaying the construction project. Construction contracts generally excuse delay where the delay is caused by:
- An "act of God" or unexpected weather
- Labor problems and issues
- An owner who has changed the project or design
- Other causes that the contractor could neither foresee or control.
Often, the contract provides the contractor with a time extension if there is an excusable delay. The contractor is typically required to give the owner notice of the delay and the cause.
Acceleration occurs when the owner of property compels the contractor to complete the construction project ahead of the scheduled time. Acceleration may increase the contract price because of the contractor’s new costs and labor requirements.
In situations where the owner has refused to give the contractor an extension of time for an excusable delay, or a reasonable time extension request, constructive acceleration may occur. Through constructive acceleration, the contractor may recover for the additional expenses incurred for the owner’s refusal. A contractor must, however, actually accelerate the performance and incur the extra costs in order to recover under the constructive acceleration doctrine.
A mechanic’s lien or a material men’s lien is a method used by contractors or other people employed for the purpose of improving real property to ensure that property owners will pay them for services performed and materials. If the property owner does not pay for the services or materials, the mechanic can initiate a court proceeding to enforce the lien, often compelling a sale of the property to pay for the services and materials. Learn more about mechanic’s liens
Construction projects are usually subject to strict deadlines. If a dispute arises, a real estate attorney can help you explore your options and pursue what is in your best interest. Additionally, every state has different lawsuit filing details, procedures and deadlines for a breach of a construction contract claim. A lawyer can help a party conform to the applicable procedural rules and collect all the proper documents to prove a breach. An attorney can also help a contractor or subcontractor adhere to the strict deadlines for filing a mechanic’s lien. Further, an attorney can assist an owner with a mechanic’s lien to prevent the property from being sold.