Owners of New York based construction businesses are more likely to be mindful of construction law issues relating to contract performance and defective work. Many however are unaware they are also under increasing risks of liability in compliance with newly enacted requirements under New York Employment and Labor Laws.
Construction, in particular, adapts and responds to changes as a regular course of business. From changes in codes, regulations, and client preferences, staying abreast of the trends influencing the industry is essential for those who hope to earn their living from it.
Networking has always been an important function for anyone running a business.
Like the strings of a marionette puppet, after the completion of a New York construction project, there are various legal theories that serve as ties between the builder and the owner. For the builder, the sooner these lingering ties can be removed the less exposure they face for claims of defects. For the owners, the longer they are able to establish these connections, the longer they may have legal recourse against the builder for defects.
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.
Much construction litigation arises from disputes over Scaffold Law liability. Simply, the Scaffold Law makes certain contractors and project owners liable for injuries to workers on construction sites. The Scaffold Law has been criticized for the burdens it imposes on contractors and owners and for allowing workers to collect even if they have ignored safety rules.
In a nutshell, the “economic loss rule” is a rule that courts use to prevent a plaintiff from against a defendant for a tort (usually negligence) when the essence of the claim is for failure to live up to the terms of a contract.
A new contractor regulation has been implemented. Residential contractors in New York will soon be required to provide certain homeowners with information relating to the benefits and costs of having automatic fire sprinkler systems installed.
The adage that you can not get blood from a stone may have its place in the rationale of New York Lien Law. Not that you will find this term included in any of the sections of the law, but this concept of reality is reflected in the hierarchy, structure, and availability of funds in the occurrence of a construction dispute.