Perhaps the most common construction-related dispute is the refusal of a party to make payment to its contractors or subcontractors. While litigation is the traditional avenue for resolving such disputes, methods of alternative dispute resolution such as arbitration and mediation are enjoying growing importance in the field of construction law.
Continue reading “Alternative Dispute Resolution An Option For Construction Contractors Under NY’S Prompt Payment Act”
What does Long Island construction law say about terminating construction agreements? Despite the increasingly common use of arbitration in construction agreements, the New York Supreme Court has clarified that owners cannot terminate their construction agreement and fail to follow requirements for termination without repercussions. A recent pre-arbitration victory by John Caravella, Esq. confirms that the court unwilling to waive terms contained for termination and remedial efforts post termination to cure will not suffice to transform a wrongful termination into a termination for cause.
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To minimize potential legal problems when planning construction, whether the project is a large commercial project, a new residence, or even a renovation to an existing structure, care must be taken to have essential terms included in the contract. The failure to identify essential terms in the construction contract will lead to project confusion, extended completion time and expenses, as well as raise the likelihood of a future legal dispute. Below are several terms to consider in any construction contract:
Continue reading “Considerations for Drafting Construction Contracts”
Construction contracts require contractors and subcontractors to carry commercial general liability, or CGL, insurance and to name not only the contracting parties but additional third parties, such as project owners, as additional insured. Recent commercial general liability litigation, however, suggests that contractors and subcontractors should review the language of their CGL policies carefully because third parties to the contract, even if they are contractually required to be additionally insured, may actually be excluded by the insurance policies.
Continue reading “Recent New York Litigation Highlights Increasing Risks to Contractors”
One topic that came up in my practice recently was a contractor’s potential exposure to liability for punitive damages under New York law. As the name suggests, punitive damages are awarded above and beyond their contract or property damages, ‘where the wrong done was aggravated by circumstances of violence, oppression, malice, fraud, … on the part of the defendant, and are intended to address the plaintiff’s mental anguish or other aggravation, to punish the defendant for its behavior.’ Black’s Law Dictionary 390 (6th Ed. 1991).
Continue reading “Punitive Damages Claims in New York Construction Contract Disputes”
Any property owner considering construction work will want reassurance that the work will be done well, and will be free of defects for a specified time frame. Many contractors even include a warranty clause in their contract. Such warranties (also called guarantees) require the contractor to correct any defects through additional work on the project over the specified time. What are some of the specific factors within Construction Warranties?
Warranties under New York law may be found where they are expressly given, as in the example of the contractor above; but may also be implied through the conduct of the parties, or by operation of the law. For example, if the contractor agreement did not contain any warranty clause, the owner would be able to bring a legal action against the contractor for breach of warranty or contract within six years of project substantial completion under the New York Uniform Commercial Code. Many property owners may be surprised to learn that they may actually be better protected with no warranty provision in the agreement, over one that states coverage for a shorter time frame.
Continue reading “Construction Warranties in New York. Sometimes Less is More.”
Can homeowners be held responsible for injuries that may occur to contractors while work is being done on their property? Many homeowners love new home face-lifts, but did they ever think what a dangerous home improvement job consisted of? Well, what happens if a contractor is injured while working? Who is responsible for their medical costs?
With respect to homeowner liability for contractor injuries in New York, homeowners of one or two family dwellings are exempt from liability from any contractor injuries suffered while work was performed on their property under labor law § 240 & § 241, unless he or she has directed or controlled the work being performed.
Under New York State Law §§ 240 and 241 a homeowner can be found liable for any resulting contractor injuries only if their contractor can show the homeowner provided specific instruction as to how work is to be performed or the homeowner provided certain tools or equipment to be used.
Although, incidental homeowner interactions are not sufficient to invoke homeowner liability for injuries, a showing of directing the actual work performance is necessary.
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Despite much construction litigation, New York courts who govern Long Island construction law are agreed that an unlicensed home improvement contractor cannot recover against consumers. That has not, however, stopped unlicensed contractors from arguing exceptions to that rule. A recent court victory by John Caravella, Esq. confirms that courts remain unwilling to accept excuses from unlicensed contractors.
In Orefice v. Guma Development, homeowners sued an unlicensed contractor for defective construction. Notably, the local municipal code requires that any person doing business as a contractor be licensed by the municipality. A corporation does not require its own license if a licensed contractor is employed by the firm as a supervisor.
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The minimum wage and overtime provisions under federal and New York law affect all employers, but contractors are further subject to an additional, unique wage scheme in the form of prevailing wages.
New York Labor Law provides that the wages paid to laborers, workmen, and mechanics on public works construction projects may not be less than “the prevailing rate for a day’s work in the same trade or occupation in the locality within the state where such public work . . . is to be situated, erected or used.”
Contractors in New York may face significant liabilities on any violations and are well advised to understand these requirements under New York law in the article available for download here prior to being cited with any violations.
John Caravella, Esq. is a construction attorney and formerly practicing project architect at The Law Office of John Caravella, P.C., representing architects, engineers, contractors, subcontractors, and owners in all phases of contract preparation, litigation, and arbitration across New York and Florida. He also serves as an arbitrator to the American Arbitration Association Construction Industry Panel. Mr. Caravella can be reached by email at [email protected] or by telephone at (516) 462-7051.