Construction companies are especially vulnerable to legal problems due to the nature of their contracts and the large scope of many jobs, among other things. As construction lawyers know, even the best-laid groundwork can’t ensure nothing at all will go wrong. There are simply too many moving factors, too many parties involved on most construction jobs to account for every eventuality.
That said, understanding the risks, and where and how issues commonly arise, is invaluable for construction lawyers looking to protect their clients. Let’s take a closer look at the factors that can expose construction companies to legal problems.
Large sums of money moving through contracts
Many construction jobs involve a multitude of different parties to operate successfully, including contractors, subcontractors, sub-subs, suppliers and more. An effective construction contract accounts for all these various parties, and can therefore become fairly complex.
It also means that within a given job, even within a given contract, various monies are moving through multiple hands. These are often large amounts of money that may contain various stipulations pertaining to their dispersal, such as a pay-when-paid clause.
Anytime you have large sums of money at stake, you increase your exposure to legal issues. Likewise, in any contract involving multiple parties, there are simply more factors that can go awry. Both of these factors are common to construction contracts, making the industry more vulnerable to potential litigation.
For this reason, whenever possible one should ensure a construction contract is as airtight as can be prior to the start of a job. Ideally, a construction attorney should review a contract before it gets signed and work begins. At the very least, all parties involved should read and understand the contract and their role in it. Misunderstandings or misinformation is one of the primary incentives for legal fallout down the road, and can be headed off by getting everyone on the same page from the outset.
A plethora of regulations and laws
The construction industry is rife with various laws and regulations for how work can be performed and how repentance can be sought if something goes wrong. Failure to properly adhere to regulations on the job can be a fast track to legal issues. Ensuring compliance in the contract, and throughout the work performed, not only protects your clients from legal fallout. It also lends professionalism and security to their reputation.
Construction laws and regulations can vary greatly from state to state. For example, when filing a lien, most states do not require a notice of intent to lien. However, some states like Colorado, Louisiana, and a few others do require a notice of intent to lien. Failure to file one in those states can result in forfeiture of one’s lien rights.
Similarly, pertinent regulations will vary depending on whether the job is a public or private project.
The multitude and complexity of various laws and differences in regulation across the country also contributes to the risk for legal issues on construction jobs. For construction professionals, having someone in their corner who understands the unique requirements of a given job is imperative. That’s why Levelset makes it easy for people in the construction industry to find construction lawyers in their area through our Attorney Network.
Every construction job is unique
At the end of the day, every construction project requires its own unique approach.
Ensuring everyone is on the same page prior to the start of a project will help head off the potential for legal issues. Ensuring compliance with state-specific laws and regulations is key, as is starting from a contract designed specifically for the project rather than a form document.
While the tips we’ve discussed can help mitigate the risk of legal problems, sometimes things can still go wrong. When that happens, thousands of contractors visit Levelset every month looking for legal help and advice. We connect them with construction lawyers in their area who can help them navigate their issues, through our construction legal plan, Legal Guard.
Are you a construction attorney looking to meet new clients who need legal help in your area? With Legal Guard, there’s no cost or long-term commitment on your part. Send us an email to learn more and join us in helping construction professionals take on their legal problems.