When hiring a contractor, such as for home repairs, most homeowners and contractors sign a legal contract that specifies the terms of the arrangement. This includes the work that is to be completed, the amount that is to be paid for the work completed, and a time frame that sets a deadline for the when is to be completed.
The most common lawsuits filed against contractors occur when the contractor fails to follow the agreed upon contract. Examples of this include missing deadlines or failing to perform all of the work required.
Some other causes for lawsuits against contractors include:
- The contractor completes the job but unsatisfactorily;
- The contractor completes the job but the work violates safety standards;
- The contractor took advantage of the homeowner, such as by accepting a deposit or payment but then failing to complete the agreed upon work; or
- The contractor overcharges which could lead to a breach of contract claim.
Entering into a contract with a contractor who then fails to meet their obligations, or performs disappointing work may justify a legal claim against them. Lawsuits filed by homeowners against contractors are generally filed in civil court.
Once a homeowner has decided to file a lawsuit against a contractor, there are a few different types of legal claims they may file. The most common are:
- Breach of Contract Claim: Breach of contract refers to one party failing to follow through with their side of a contract. This may occur when the party has not delivered on their claims within an appropriate time frame, or when one party fails to perform at all. A contractor may found liable for breach of contract if they miss deadlines, do not begin the project, partially complete the project, or fail to utilize construction materials that were previously agreed upon in the contract. There are four main types of breach under the breach of contract umbrella:
- Minor Breach: This occurs when a party fails to perform part of the contract, but does not violate the entire contract. This is sometimes referred to as an impartial breach;
- Material Breach: This occurs when a breach is so substantial that it impairs the contract as a whole. In addition, the core purpose of the agreement must be rendered completely defeated by the breach. This is sometimes referred to as a total breach;
- Fundamental Breach: This is essentially the same as a material breach. However, a fundamental breach is considered to be much more egregious than a material breach; or
- Anticipatory Breach: An anticipatory breach is a breach that occurs when one party notifies the other that they will not be able to fulfill the terms of their contract. Anticipatory breach may also be referred to as anticipatory repudiation.
Breach of contract claims generally allow a homeowner to recover damages such as a refund of payments made to the contractor. Alternatively, they may be able to refund the difference in costs for hiring a new contractor to complete the project.
- Fraud Claim: contract fraud occurs when one party knowingly makes a false claim, intending to trick or deceive the other party into signing the contract. A homeowner may sue a contractor for fraud if they told the homeowner that the completed project would look one way, but the result is vastly different. Another example is if the contractor promises only to use specific, high grade materials, then uses less costly and lower quality materials after accepting payment; or
- Defective Construction Work Claim: construction defects are those that lessen the value of your home. This includes:
- Design deficiencies such as a roof not being built to code, which can result in water intrusion or inadequate support;
- Material deficiencies such as inferior sheetrock in damp areas;
- Construction deficiencies as a result of poor workmanship, such as plumbing and electrical issues; or
- Subsurface deficiencies such as a home being built on hills or other unstable conditions.
Once again, it is important for both parties to put any agreements to perform work into a written contract. However, if there was no written contract for services, you may still sue or be sued by a contractor. The reason that you can still sue a contractor without a written contract is because you may argue that an implied or oral contract was formed.
For example, if you hire a contractor to paint your whole house, but they only paint 80% of your house, you may be able to have a court enforce your oral contract by having the contractor partially refund you or pay the costs of having the work completed.
Another example is hiring a contractor to paint your house blue, but they paint it red. In this scenario the work was fully completed, but the work was not performed correctly. In this situation it may be hard, without a written contract that specified the contractor’s obligation to paint the house blue, to succeed in a lawsuit against the contractor. In fact, such situations usually end up being “he said, she said” situations in court. Generally, the person bringing the lawsuit will have the burden of providing evidence of some agreement to perform the services.
As can be seen, suing a contractor typically requires that you first prove there was a breach of contract, or at a minimum an agreement for services to be performed. Regardless of whether you have a written contract or not, suing a contractor is often a complicated and lengthy process. This is especially true since state laws vary.
Therefore, it is in your best interests to consult with a well-qualified and knowledgeable business attorney should you find yourself needing to file a lawsuit against a contractor. An experienced attorney can help you understand your legal options, as well as help you build your case.