General contractors in the construction industry have to organize, manage, and complete a wide range of tasks, and have to do so seamlessly in order for the construction project to go smoothly. If any one of those tasks goes wrong, it can open the general contractor to litigation and the potential for legal liability.
The construction lawyers at the Katz Law Group have nearly four decades of experience in guiding general contractors through these risks in central Massachusetts. By hiring them at the start of a construction project, general contractors can tap into that experience, line the project up correctly, steer clear of disputes that can escalate into litigation, and efficiently resolve any problems that do occur.
Preparation Work for Construction Projects
Much of the work in a construction project is in preparation for the actual building. As any experienced general contractor knows, though, missteps in the preparation stage will only compound as things move forward.
Just a few of the issues that general contractors need to work through before the construction begins include:
- Securing the necessary financing for the project, including any lines of credit that will be necessary
- Settling the scope, specifications, and demands of the construction project
- Getting adequate insurance
- Land purchase and confirmation of title, as well as setting up any other type of arrangement, such as a sale and leaseback
- Zoning issues, including any necessary variances or special use permits
- Environmental concerns, particularly if the property has contamination issues or if its future use may create them
- Complying with Massachusetts' Home Improvement Contractor Statute, if necessary
Much of this revolves around drafting contracts or reviewing contracts that were created by someone other than the general contractor. The precise terms and conditions in these contracts can make a huge difference in the general contractor's rights and obligations. Understanding how a particular contract can potentially expose the general contractor to liability or would impose other obligations on the contractor is essential, and can avoid costly surprises.
A Wide Range of Disputes Can Arise
Once work begins, there is a huge range of disputes and legal issues that can crop up. Just a few of the most common or serious issues include:
- A breach of contract
- Discovery of unknown variables that make construction far more expensive
- Employment disputes, including disputes or grievances with a unionized workforce
- Change orders and other modifications to the scope and requirements of the project
- Breach of contract by a builder or subcontractor
- Subcontractor default
- Breaking equipment
- Inadequate supplies or price fluctuations that threaten the project's budget
- Hazardous material spills
- Zoning denials and appeals
- Alleged construction defects
- Workplace injuries
- Labor and workplace safety inspections or violations
- Unforeseen circumstances, like acts of God, that makes performing under the contract impracticable or impossible and trigger the agreement's force majeure clause
These can cripple a construction project, or at the very least imperil the general contractor's financial security. In many cases, these issues and disputes can escalate quickly. If they do, they can get even worse and potentially even more costly.
Resolving Disputes Before They Turn Into Litigation
Because there are so many moving parts during the construction process, it is critical to resolve disputes quickly and efficiently. If things are left to escalate, tasks can go unfinished and throw the project off schedule, which can make it impossible for other parties and subcontractors to perform their obligations, as well. The costs of any dispute – even a groundless one – can be substantial.
With so much on the line, negotiating a resolution can be difficult. Some subcontractors know this and use it to their advantage as leverage, thinking that they can extract concessions or more money for their performance.
This can put general contractors in a tricky spot. On the one hand, their focus needs to be on the completion of the construction project. However, letting a subcontractor use the project's completion as leverage for their own goals would set a dangerous precedent.
Negotiating a resolution that satisfies both of these interests is crucial for general contractors. Having an experienced construction lawyer on hand can make a huge difference in the outcome. It can also better prepare you for mediation or arbitration or, if absolutely necessary, litigation if your attempts to make things work out do not get anywhere.
The Potential for Significant Liability is Very Real
If things do go wrong, general contractors are often thrown between two different sides, both of whom can take legal action against them: The party that caused the dispute, and the client who is paying for the construction project.
Depending on the nature of the dispute, the party making it can levy a wide variety of legal claims against the general contractor, including:
- Breach of contract
- Employment violations, like for alleged unpaid wages or overtime
- Wrongful termination
- Unfair trade practices
Meanwhile, the general contractor's client can take legal action if the underlying dispute imperils the rest of the construction project. These can manifest in lawsuits alleging:
- Breach of contract
- Construction fraud
Both of these lawsuits can cause substantial pain for the general contractor – pain that would be felt on top of the underlying dispute – including:
- Attorneys' fees
- Court costs
- Allegations that damage the general contractor's business reputation and brand
- Mental and emotional stress and a sense of distraction from the construction project
- Legal damages, if the lawsuits against the general contractor prevail
Avoiding any of these outcomes is extremely important.
Construction Attorneys at the Katz Law Group in Central Massachusetts
The construction lawyers at the Katz Law Group has spent nearly four decades in the central Massachusetts area representing general contractors in the construction industry. With their legal advice and guidance, general contractors have been able to see potential legal threats before they could materialize and managed to steer clear of them or, if the legal issue proved to be unavoidable, handled it with a level of care and efficiency that drastically mitigated the damage it caused.
Call the Katz Law Group at (508) 480-8202 or contact them online.