Architects in New York can be found liable for damages in various situations, depending on who claims damage, and the basis of the claim itself. For example, where an owner has a direct contract with the architect, the owner could bring forth a simple claim based on the contract or a claim based on a tort action. Such a tort action, based on negligence, is a claim for malpractice.
This is a general information article and should not be construed as legal advice or a legal opinion. Readers are encouraged to seek counsel from a construction lawyer for advice on a particular circumstance.
When homeowners are ready to get the ball rolling with their new construction project, excitement and happy emotions usually take over when signing the construction agreement. With that said, however, there is an important relationship from start through final completion with your contractor, and significant issues could develop. When advising in breach of contract and contract termination cases, there are five examples all homeowners should look out for before pulling the trigger, that may justify your agreements termination. Continue reading “5 Reasons that may Justify the Termination of your Construction Agreement”
Contractors and subcontractors frequently consult with their attorneys in the negotiation of construction contracts before they are signed, but counsel’s involvement generally ends at that point until and unless litigation arises down the road. Nevertheless, additional consultation with attorneys after execution of contracts can ensure that contractors and subcontractors meet their respective obligations and may confer savings that far offset the costs.
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.
Many homeowners who consult with me regarding construction disputes are not only financially damaged but emotionally distressed, and understandably so. Our homes are not only our biggest financial investments but our sanctuaries, and misconduct by unscrupulous contractors that damages those sanctuaries makes us feel that we have no place of safety and, in some instances, makes us worry that we may be homeless altogether. Thus, the question is often posed to me whether homeowners can collect damages for emotional distress that results from construction contract disputes, in addition to their economic damages.
Under New York construction law, much emphasis is placed on the “improvement” of real property (real estate). Indeed reference to improvements are often found in New York construction contracts, and establishing an improvement is required for a contractor to establish a valid lien on a privately owned project. But what specifically are the ins and outs?
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).
Changes are an unavoidable aspect of construction. Although thorough effort and coordination are required in preparing the original project contract, specifications and construction drawings, there will still be changes. This is why owners are provided the right to make changes to the work under a typical contract changes clause.
However, the ability for owner requested changes, even if provided in the contract, are not without limitations, restrictions, and consequences. After all, what purpose would any of the project documents, contracts and drawings serve if they were subject to constant change? What good would the contract serve if the owner could make any change(s) without consequence?
Often times in discussions with contractors, I hear many of the same types of issues repeat themselves, and from the perspective of counsel, quite preventable. While not every potential problem on a project can be determined upfront, keeping the following 5 tips for contractors in mind might be helpful in preventing problems, improving business practices, and effectively managing risks.
- Be proactive throughout the project. You know that your work is good, and you expect your project owner to be pleased, but some owners may be difficult or unreasonable to please. Sometimes complaints as to work in the trailing end of a project can also be made as a pretext to avoid making full payment. For that reason, don’t wait for problems to arise. You should document the quality, completeness, and progression of your work as you are working on the project. I have seen projects where contractors were no longer allowed access to the project, and obtaining access to document completeness of work can be difficult once a problem arises.
At a minimum, you should be photographing conditions of all areas of the site within the scope of your work to show (1) existing conditions at the time you begin work, (2) inspection phases, (3) substantial completion, and (4) final completion.
In a recent client conference, I was asked, “So what is arbitration, anyhow?” In the context of a construction claim or in seeking to prevent such a claim, there are several significant advantages that arbitration can provide in lieu of litigation. In today’s challenging business environment, this signifies awareness of the various options available that could make an important impact on your business’ circumstance.
Briefly stated, arbitration is a private, informal process by which all parties agree, in writing, to submit their dispute to one or more impartial persons authorized to resolve the controversy by rendering a final and binding award.[i] What makes this process unique is the ability, with some advance consideration, to customize and tailor the dispute resolution process to suit the needs of the company.