A Commercial Contractor’s Guide
Preparing for the worst-case scenario is a part of a contractor’s job these days. Not only do you have to educate yourself on what could go wrong, but you also must figure out how to tackle every new wave as it comes and then use what you learned to prepare for the next one. This is especially true when facing a lawsuit over defective work. In the last blog, we broke down what defective work means in the commercial construction world. It is great to know what could be considered defective work as a commercial contractor, but what happens if you get hit with a claim for defective work from your client? In this blog, we will discuss a few of the best ways to approach receiving a defective work claim and how you can better prepare for them in the future.
Troubleshooting a Defective Work Claim is Better Than Termination
If you receive a defective work claim, you must respond in writing. Explain whether the issue is or is not a defect, why, and what you intend to do to address it in your response. You will need this paper trail, believe us. If the owner thinks the work is defective, they can—and likely will—terminate your contract, hire another contractor to complete the work, and sue you for the additional expenses brought about by that process. If you do not have a paper trail record of your response, it makes it all the easier for them to prove that your work is defective. Take these claims seriously and respond to them immediately. Do not just let them languish—because that is how you get fired and kickstart a lawsuit.
If the defective work is significant, get with a construction attorney to weigh the pros and cons of the options you have for defending against a defective work claim. When looking at the contract, what are the legal ramifications of the issue, and is it best to fix the work or not? We will be honest; often, your best option will probably be just to take the hit and fix the work. If you are at the point where the argument is about whether the work is defective or not, the odds are that they have a basis in the contract that you could feasibly lose on. However, weighing the cost is a huge and very valid factor to consider when deciding. What will it cost to fix the work versus what will it cost to proceed to court? Ask yourself this question before deciding. Your business’s financial livelihood will depend on it.
Defective Work Claims that are Not Your Fault
If there is defective work, but a different contractor is responsible for the error, and you are not, you will want to have prepared on the front end, or else you will find yourself in a bind. When you respond to the claim for defective work in writing, include a detailed description of why you are not responsible for the error and why the other contractor is. Your case gains significant advantages if you have documentation such as daily reports, progress photos of your work, and sign-off sheets from a walk-through. Though you may still be the one who must fix the problem with the work, you will be better supported when you can prove you are not the party responsible. Here’s what we mean when we say that:
One of our clients is a window contractor who had gone in and installed windows in a building and did so correctly. Another contractor working on the site bumped into the framing and jostled them to the point of being uneven and slanted, and the GC filed a claim for defective work against the window contractor for doing a poor job. Our client responded in writing and told the GC that he was not responsible but was looking into it. He then spent some time figuring out who was responsible for the issue. While he still had to fix the work and restore it to where he had left it due to terms in his contract, he was able to back charge the costs of that process to the contractor who was actually responsible for the defect.
Do not take the blame for faulty work or job-site errors of another contractor. Keep your ducks in a row, document your process, and make sure you let the client get eyes on your finished work before wrapping up the project. This will allow you to ensure you are not wrongfully taken to court for someone else’s mistakes.
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Defense Against Defective Work Claims: A Commercial Contractor’s Security Blanket
One final situation we want to address is far rarer than the one we previously discussed, but we have still encountered it. Sometimes, defective work can happen after you have completed the job and can happen because of something that is not your fault but is your responsibility. Under these circumstances, you may have to approach the situation differently and prepare for it in ways we have not mentioned yet.
For example, we had a client who was a plumber and installed plumbing in a building exactly to the specs in his contract and using only approved materials. He did a great job on the project, and the client was pleased. However, after he was finished, the building sat unoccupied for six months. During this time, a fixture he had installed in the ceiling burst because of external conditions and flooded the room it was in. Because the building was uninhabited, it sat flooded, and the rest of the room suffered damage because nobody was around to notice the issue and remedy the water leak quickly.
He was sued after his work had already been completed to satisfaction for the damage done by defective work. Though he did not do anything wrong, he was still held responsible for the defect. Fortunately, his insurance covered the suit in this case, and he got off easy. Let the lesson here be to invest in great insurance because he would not have been so lucky without excellent, construction-specific insurance.
Construction can be a rough-and-tumble industry, and there are many ways a person can get screwed by circumstances on a commercial project. That is why it is important to stay attentive, prepare your team on the front end, and sharpen your defense by connecting with a team of experienced construction lawyers. Whether you are or are not responsible for defective work, do not let it be the reason you get stuck in a lawsuit. Our team of construction attorneys can help you fortify the future of your business, so take the plunge and reach out today.
This article is intended as a general educational overview of the subject matter and is not intended to be a comprehensive survey of recent jurisprudence, nor a substitute for legal advice for a specific legal matter. If you have a legal issue, consult an attorney.