When you hire a contractor for a construction project, you do so with the reasonable assumption that they will complete their work on time. Your contract may even have project deadlines. So, if a contractor has caused a delay on a construction project, you might wonder about your ability to hold them accountable under construction law.
Common Causes of Contractor-Related Delays
Some of the most frequent causes of contractor delays on construction projects include:
- Poor project management or scheduling
- Insufficient labor
- Delays in obtaining construction materials
- Failure to obtain permits or inspections promptly
- Issues with subcontractor work or disputes with subcontractors
In some cases, a delay to a construction project may happen because of something outside of a contractor’s control, such as supply chain disruptions or inclement weather. Ultimately, the cause of a given project delay will determine the potential legal remedies available to you.
Contractual Protections and Delay Clauses
Your remedies for a construction project delay caused by a contractor may depend on the terms of your contract with the contractor. Here are some potentially relevant contractual provisions and what they entail:
- Force majeure clauses : A force majeure clause may exempt a contractor from liability for a breach of contract when a delay occurs due to events outside the contractor’s control, such as natural disasters, supply chain disruptions, civil unrest, etc.
- “Time is of the essence” clauses : A project delay may not always constitute a material breach of a construction contract. However, when a contract includes a “time is of the essence” clause, the parties have agreed that completion of the project by the stated deadline constitutes a material term of the agreement.
- Notice requirements : Construction contracts may require the contractor to provide prompt notice of any project delays. Alternatively, a contract may require a project owner to give a contractor notice of default and an opportunity to cure by catching up on work.
- Liquidated damages clauses : Should calculating the financial losses caused by a project delay prove impractical or impossible, parties may negotiate a liquidated damages clause, which establishes a pre-set financial award for a project owner when a contractor breaches the construction contract due to their delay.
Legal Remedies Available to Property Owners
Property owners may pursue various remedies for losses caused by a contractor’s delay in a construction project. Common examples of legal remedies include:
- Withholding payment : A project owner may have the right to withhold payment for the next stage of a construction project if the contractor has delayed completion of a prior milestone.
- Financial compensation : Property owners may file claims or lawsuits to recover compensation for losses resulting from the delay, such as loss of rental income, additional interest on loan payments, or the cost of hiring a replacement contractor.
- Specific performance : In certain circumstances, a property owner may seek specific performance as a form of relief in a lawsuit, which requires the contractor to perform their obligations under the construction contract.
Steps to Take When a Contractor Causes a Delay
If a contractor has caused delays in the progress of your construction project, you can take the following steps to pursue a remedy:
- Keep detailed records of work progress (including time-stamped photographs), communications, and costs or losses that result from the delay
- Review the terms of the contract to understand rights and obligations when a delay occurs.
- Provide the contractor with formal notice of their potential breach of contract due to their delay.
- Consult a construction law attorney to assess the contractor’s liability and evaluate your legal options.
Contact a Construction Law Attorney Today
Construction delays can have significant financial consequences for your bottom line. Fortunately, you may have potential legal remedies that can help you recover from a delay. Contact August Law, PLLC today for a confidential consultation with a construction law attorney in Michigan. We look forward to discussing your options for obtaining the relief you deserve.