Attorney John Mlnarik

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What Can I do About a Late Contractor?

Posted by on in Real Estate Law
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b2ap3_thumbnail_images-3_20160802-183955_1.jpgWhen a person hires someone else to provide goods or services to him or her, the terms of the contract dictate when the work is to be performed or the goods to be provided. However, situations can occur in which the contractor is not providing timely delivery, and the customer may pursue legal action to enforce his or her rights.

Contract Provisions

Courts give wide breadth to individuals to enter into contracts in a voluntary fashion. Therefore, courts will usually hold the parties to the terms of the contract that they both willingly signed, absent certain rare exceptions. If the non-breaching party wants to enforce the contract, the court must be able to refer to clear provisions in order to effectuate the agreement as the parties intended.

Time Is of the Essence

Many contracts contain a provision that states that “time is of the essence.” At common law, the timing of the contract was not considered to be an essential element. Therefore, minor deviations from a contractor’s schedule did not warrant an award of damages or the right to terminate the contract. Given this contract interpretation, many parties decided to include a clause in their contracts that stated “time is of the essence” so that the timing of the contract would be considered a material term.

Deviating from the time provided for in the contract would then be considered a material breach. These provisions were particularly common in contracts for loans, since the delay of loan funds could delay other pursuits, such as purchasing real estate.

Today’s interpretation of this provision provides that not meeting the timing provided for and specified under the contract amounts to a material breach of the contract. However, a court may give the breaching party a certain amount of time to cure the breach or may not enforce the provision if doing so would amount to an unjust result.

Sale of Goods

Courts consider provisions related to delivery dates for the sale of goods to be very important. If the delivery is not made in time, this is usually considered a material breach. However, the same is not usually the case for the timing of payments. Courts usually give parties more leeway to make payment on the delivery.
The sale of goods is governed by the Uniform Commercial Code. If contract provisions are not included regarding timing, UCC rules and practices apply. Therefore, even if a contract is silent on the issue of timing, the court will infer the timing based on UCC rules.

Breach of Contract

The primary method of holding a contractor accountable for being late is to pursue a breach of contract case against the contractor in civil court. The plaintiff must establish the validity of the contract and that the defendant committed a breach before damages can be awarded. A plaintiff can help substantiate the breach by documenting all attempts to reach the contractor, including keeping copies of all certified letters that were sent to the contractor and documented receipts showing that the contractor received such communications yet failed to finish the work. Contracts, receipts, canceled checks of payments and photographs of the uncompleted work can help substantiate the claim.

Other Remedies

In addition to filing a lawsuit against the late contractor, there are other and alternative methods to take action against such a contractor, including the following:

Negative Review

Many contractors rely on customers vouching for their work. A contractor may be motivated to return to a job if he or she fears that the customer will leave a negative review online, in a local publication or with the Better Business Bureau.

Licensing Board

Contractors must usually be licensed by some state agency. If they do not act in accordance with professional standards, customers may be able to make reports to the licensing board regarding uncompleted or highly delayed work. The board may investigate the claim and may sanction the contractor if there is misconduct. Additionally, sometimes the licensing board will attempt to get the parties to work out a solution.

Bonding Company

Some contractors are bonded. If there is a problem with the job, the customer may be able to contact the bonding company and receive compensation for the incomplete work.

Mediation

In some cases, a contractor may be late due to extenuating circumstances, such as an illness, family death or other extraordinary circumstance. Going through mediation is usually much less expensive than litigation and allows the parties to work out an agreement outside of court. The contractor may agree to finish the job within specified points in time or accept a reduced amount due to the delays.

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Guest Sunday, 24 October 2021

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