Contractor Responsibilities: Key Aspects
Contractors are typically bound to complete work they have undertaken within a specific period of time. Such obligations can be found in their respective contracts as well as in common law principles relating to the completion of construction work.
Contractors are also generally held to certain quality standards. Such standards can also arise expressly in contracts , as well as implicitly in the form of durability and fitness for purpose. For example, most contractors will undertake to "finish" all their work. Conversely, if tilework is not grouted, then the roofing membrane is not properly adhered, the plumbing leaks, or a fracture in a stair railing is not secure, these defects may be characterized as "unfinished work."
Collecting Evidence of Work Not Done
Gathering and presenting evidence is key in a lawsuit against a contractor for unfinished work. The more evidence you have, the stronger your case will be. In addition to the photographs and videos you took when you documented the damage as it progressed, you must have substantial records of the contracting process. This means you should have all of the documents that were exchanged between you and the contractor. You will need copies of any permit applications, contracts, plans, schedules, and/or change orders. Many legal cases are decided based on the terms of the contract. If the contract is written well, it will clearly lay out the schedule the contractor agreed to, the quality he was to adhere to, and any penalties for unfinished or lagging work. If the contract states that work must be done by a certain date and that no substitutions for the style or craftsmanship are permissible, you will have a very strong case.
Be sure to keep all of your receipts for the materials the contractor needed to purchase, as well. You may also have to testify about the progress that occurred on the project and what you paid, versus what the contractor was paid. You can document his receipt of your check either with a photocopy or a photograph. If your hiring of the contractor was added to a loan that had extra funds available for upgrades, all of those records will be vital, as well.
Raising Concerns with the Contractor
Before filing a formal complaint to sue a contractor for faulty or unfinished work, you should first try to get the contractor’s attention. This is important because communication is the most important step of any legal process. You should first try to speak with the contractor directly and explain to him the nature of the issue. Explain to the contractor why his service was unacceptable, and how he can improve in the future. It may be possible that the contractor will respond to your complaint courteously and come back to address the issues you had with his work. However, as you might have already learned, contractors are not always reasonable, and by now you may be familiar with the saying "the customer is always right." How you choose to draft a letter may be up to you, but the purpose of the letter (aside from venting your frustrations to the contractor) is to ensure that the contractor knows without a doubt that you don’t like the sub-par work. The process to write an effective demand letter can be broken down in to five major steps: A demand letter is similar to a contract in that it outlines your obligations and those of the contractor. In this case, you will be requesting that the contractor return to your home to finish or repair his work and that he get your direct approval if he plans to make any modifications while he is there. Furthermore, you should outline to him why he should comply with your requests. A demand letter can be an effective demand for the contractor’s compliance. Sending a demand letter also has the benefit of providing you with documented evidence that you attempted to communicate with the contractor. If the case ends up going to court, having a copy of a demand letter makes it clear to the judge that you attempted your best to resolve the situation before you take formal legal actions to sue in court.
Looking into Other Dispute Resolution Options
As an alternative to a lawsuit, you might want to explore mediation or arbitration. Mediation is a process whereby the parties, with the assistance of a neutral third party, the mediator, discuss their underlying issues in hopes of finding a solution. The mediator does not make any binding decisions, but rather tries to facilitate discussion between the parties in hopes of reaching an agreement or a settlement.
In contrast, arbitration is a process in which the parties present their cases to a neutral third-party or panel of arbitrators, who then make a decision about how the case should be resolved. The arbitrator(s) makes a decision that is generally binding unless the parties agree otherwise at the outset or if it is clearly evident that the arbitrator exceeded his or her authority. Arbitration procedures vary between the American Arbitration Association and other reputable sources of arbitrators, such as the International Institute for Conflict Prevention & Resolution.
Both of these types of alternative dispute resolution processes can generally be faster and cheaper than litigation. There are a couple of potential pitfalls with these types of alternative dispute resolution methods. One possible pitfall is that the parties must agree to use them. In some contracts, the parties may agree at the outset of the process that they will arbitrate rather than litigate. They may also agree to mediate before moving to the next level of dispute resolution. Similarly, creatively reading the contract is an alternative. Consideration as to whether the contract says anything about how to resolve disputes or even what court, if any, to bring the lawsuit is important.
The other potential hazard is the possibility that you may have to give up the right to appeal some or all of the issues if arbitration is required. Another potential hazard is that your recovery may be capped at some lower amount. For example, consider what you might get after legal fees are deducted. However, there is also consideration as to whether you need a quick decision even if you review these factors. If you need a quick decision, it is generally better to mediate (or even settle) since there are no mandated timelines with that alternative dispute resolution process.
Suing in Court: First Actions
Filing a lawsuit is often the next step after trying to resolve the issue through less formal methods. If your contractor has left work unfinished, the first step is to visit your county’s small claims court website. Many states use a tiered system to handle civil lawsuits. Most small claims courts are limited to monetized claims. However, if the amount of your claim exceeds what the small claims court can adjudicate, or if your state does not have a small claims court , you will most likely be filing your complaint with your local civil court or court of general jurisdiction.
Ensure that you answer all required questions for your court’s case management form. This will enable the clerk to provide you with necessary forms and instructions. A little investment in time now will save you aggravation later.
Chances are that you will need to obtain the forms to fill out an answer to the contractor’s counter claim if he or she responds to your lawsuit. Fill out the required forms and follow the instructions regarding service of process. When processing the paperwork, the clerk may also require you to pay filing and service fees. Fees vary across jurisdictions, but typically run several hundred dollars.
Most courts allow parties to file a lawsuit either electronically or in person. Parties filing in person will take a copy of the summons or complaint and case management form, along with the filing fee, to the court clerk’s office. The clerk will then file stamp the documents and assign a court date.
Possible Outcomes & Remedies
If the contractor is found to be in breach, there are several potential outcomes to the lawsuit. The most likely outcome is an award of damages to the homeowner. California law provides that a homeowner is entitled to monetary compensation for the difference between the value of the work as was done and the value of the work as it was supposed to be done. However, this award does not even begin to cover the attorney fees, costs, time, and disruption to the homeowner’s life that arise from having to force the contractor to do what he’s supposed to.
Under the right circumstances, a homeowner could be awarded all of his attorney fees and costs in connection with having to pursue the contractor in court. However, this relief is usually granted only where there is some provision in the contract authorizing an award of fees to the prevailing party. The general rule in California is that the loser pays his own fees unless there is some statutory or contractual basis for the prevailing party to seek an award of fees. Although courts have broad equitable powers to grant attorney fees where required by law, there is no statutory basis for attorney fees in private contract disputes. There would also have to be a showing that the contractor’s breach of the contract caused defendant to incur excessive costs in enforcing the contract. Notably, that showing is extremely difficult to make in this context, because the costs that the homeowner walks away with are often the costs of moving the case along, as opposed to "enforcing" the contract.
Another possible outcome is to get an order requiring the contractor to finish the work in accordance with the contract. This remedy does not come up very often, because many times it is simply not feasible. A homeowner who hires a contractor usually does so because he wants to get the work done fast and move on with his life, not because he wants to be involved in the project for months while waiting for the contractor to finish. The law recognizes that the damages that arise from a breach of a construction contract, such as a breach by failure to complete the work, are difficult to calculate. As a result, the law also recognizes that sometimes the damages that arise from a breach are so difficult to calculate that the best remedy in some cases is to force the contractor to complete the work.
However, in virtually all cases, a court is not going to order work done after an award of damages has been made unless the court makes a finding that such an order is necessary to avoid irreparable injury to the homeowner. Order is more likely to be made where the owner is a tenant and will be evicted if the property is not habitable. Where the court does traffic in specific performance, i.e., the court orders the contractor to perform work to remedy the defect, the damages awarded could also be adjusted downward to reflect that the specific performance is going to be performed. The amount of work necessary to finish the project and the defects that remain requires evidence that the trial court must consider in deciding how to craft the best remedy.
Finally, if the work was performed on a home where the contractor failed to obtain a permit, the court may be able to award damages to cover the cost to bring the building up to code, including the cost of getting permits retroactively.
Engaging With Legal Experts
Engaging a lawyer with a focus on construction and contract law will ensure that all the necessary steps are correctly undertaken. A lawyer will have the experience to draft documents in a manner that mitigates risk. If you are a property owner and feel your contractor is not completing their obligations under the agreement, consulting with a lawyer right away can save you time and money. If you are a contractor who feels your client is holding you back from fulfilling your obligations, a lawyer can help you protect your interests. It is always best to seek legal advice sooner than later and keep careful documentation of your communications with your contractor or client.
Avoiding Future Contract Disputes
The probability that you will have future disputes with contractors may seem unreasonably high after engaging an attorney to litigate against a contractor, though this is an unfortunate reality of this area of law and an unavoidable downside of being a property owner. The truth is, however, that any owner who intends to have work performed on their property will inevitably run into contractors who do not handle their contractual obligations with the professionalism they promise during the bidding process. Thankfully , there are ways you can prevent disputes from arising and mitigate the severity of any disputes that do arise. Your best bet is to research and evaluate contractors with care before you sign their contract, but even the most diligent homeowner will sometimes find themselves with a contractor undermining the agreed upon terms and scope of work. For this reason, maintaining open lines of communication with your contractor during the entire process is the key to avoiding costly litigation. When you and your contractor establish a positive and productive working relationship, you greatly reduce the risk of conflict and are much more likely to have your project completed successfully.