Construction projects are complex undertakings. No matter the type of construction, whether commercial or residential, or public or private, virtually every project presents a host of legal challenges and business risks for the parties involved in the process. A construction dispute can derail a transaction and cause a ripple effect for all those involved in a project. With so much invested in construction projects, disputes between owners, builders, architects, engineers, and contractors often escalate to lawsuits. The team of attorneys at Levy Goldenberg LLP, New York’s leading real estate and commercial litigation firm, serves construction clients throughout all phases of litigation.
What is Construction Law?
Construction law is closely tied to the area of contract law. Although in some instances a contraction contract may be formed orally, examining the parties’ written agreement is the starting point for determining the legal rights and obligations of the parties involved in any construction project. In addition to basic terms such as the contract prince and the scope of work to be performed in a particular project, the construction contract will often include notice terms and provisions for allocation of the risk of unforeseen events. The contract may also contain dispute resolution procedures concerning potential claims arising out of the contract.
The legal relationships among the parties are mainly decided by the contractual framework that the property owner establishes with the general contractor(s), construction manager(s), and/or design consultant(s). Courts will normally enforce an unambiguous construction contract according to its terms. Ambiguities in a construction contract primarily drafted by or at the behest of the owner are generally construed in favor of the contract. As is often the case, a general contractor will bring on one or more subcontractors to perform certain specified aspects of the project work. The rights and obligations of each subcontractor are primarily defined by the terms of the subcontract.
Common Sources of Construction Disputes
Construction disputes stem from disagreements or miscommunication between the parties involved in the construction contract, particularly if the project work does not meet expectations or if the parties simply misinterpret the contract terms. Confusion over the scope of the work, changes to the originally planned work, issues with project site conditions, and a failure to make payment according to the schedule can all lead to construction disputes. Project delays tend to bring about disputes as to who should bear the responsibility, because a change in the finish date or the failure to complete work in a timely manner often leads to higher than anticipated construction costs which cut into profits, thereby causing tension between the parties.
Construction defects also frequently give rise to litigation. The type and variety of construction defect claims can vary depending on the contract, materials, and entities involved in a construction project. Defects may be the result of design mistakes, the use of poor-quality materials, subsurface deficiencies, or shoddy construction work. Construction defect claims frequently occur because of issues involving:
- Structural defects
- Electrical defects
- Water leaks and other plumbing defects
- Environmental defects
- Defective roofing
- Poor workmanship
There are many types of constructions lawsuits ranging from breach of contract to professional negligence. The remedies sought include specific performance of a contract, perfecting of liens, and money damages. Construction litigation may also deal with other claims, including:
- Breach of warranty
- Insurance coverage
- Code violations
- Mechanic’s liens for non-payment
- Foreclosure actions
- Fraud or misrepresentation
- Adjoining property owner disputes
- Abandonment and termination of projects
Resolving Construction Disputes Without Going to Court
Alternative dispute resolution (ADR) methods may be written into a construction contract. ADR is generally quicker and less expensive than litigation. With mediation, the parties submit their dispute to a neutral third party, called a mediator, who acts as a go-between for the parties and attempts to move each party towards a reasonable solution that will allow them to agree and proceed with the project. Unlike a binding decision from a judge, mediation is not a legally binding method of conflict resolution. Mediators have no power to grant any relief or to compel the parties to reach an agreement.
Depending on the terms of the contract, arbitration may or may not be binding. Binding arbitration resolves a dispute conclusively with a neutral third party, called an arbitrator, who acts similarly to a judge. The parties typically choose an arbitrator with the relevant experience to bring them to an amicable solution. Arbitration rules and procedures are more relaxed as compared to litigation.
Choose Levy Goldenberg LLP
If you are involved in a dispute over a construction project, you need an attorney who is well-versed and experienced in all facets of construction law, real estate development, and contracts. Levy Goldenberg LLP represents property owners, developers, architects, engineers, contractors, and subcontractors in a variety of construction legal matters throughout New York. Do not delay. Contract Levy Goldenberg LLP today to discuss your case.