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Construction Law Explained
No country in the world can prosper without the proper infrastructure.
Infrastructure refers to the fundamental need of a network of roads, bridges, telecommunications, water supply, airports and airways, hospitals etc. which helps the economy function.
Construction is the industry that plays a key role in providing this infrastructure.
Construction itself can be broadly defined as the process of planning, designing, financing, developing, and building something (whether that be a house, road, or dam).
In today’s age, the Construction Industry accounts for 6 to 9 percent of the total GDP of all developed countries. There is a lot of money being exchanged in the construction law industry, and for that reason, its important to know your rights on a construction project.
This article was meant to provide a general discussion about construction projects in general
Components of a Construction Team
Construction can sometimes be a complex process. It requires the involvement of a whole team of people working together.
Some think it just involves engineers and architects and a contractor. However, its not limited to these few people. There’s a whole human resource behind it.
There are numerous people that make up a construction team, which include:
- project manager,
- construction engineer,
- finance manager, and
- a construction lawyer.
My role as an attorney is to protect contractors rights, so rather than discussing all the components of a construction project, this article and the other articles on this website will hone in on the legal aspects, contractual negotiation and disputes, collection efforts, and common pitfalls that occur during construction projects.
The law deals with nearly every matter that touches a construction project.
The following are a few examples of commonly litigated construction law matters:
- disputes regarding the compliance with specifications and design in the construction of a building,
- the duties and obligations of the electrician pursuant to the contract,
- construction defect claims, breach of contract, and/or
- negligence on the project either in failure to comply with the contractual specifications or negligently causing injury on the project.
While the range of coverage regarding construction law is quite expansive, it makes the most sense to first discuss a little bit about construction contracts as that creates a foundation and governs the interrelationship between the parties on the project.
What Laws Govern Missouri Construction Contracts?
In Missouri, a construction contract is governed by Missouri statutes and case law but is also influenced by the Supreme Court of the United States’ decisions. The Supreme Court of the United States’ decisions provide the basic framework of the law and the Missouri statutes and cases give guidance regarding more specific issues that arise in construction, including, but not limited to:
- Construction Contracts
- Substantial Compliance vs. Material Breach of a Contract
- Privity and the interrelationship between contractors
- Design Professionals in the event of Negligence
- Breach of Warranty, both expressed and implied
- Unjust Enrichment
- Tortious Interference with contract
- Strict Liability Claims
- Indemnity Claims
Tip: Due to the complexity of a construction project and the potential pitfalls that could arise from nuances in the above law, you should always contact a reliable St. Louis Construction Lawyer before commencing any construction project in Missouri.
The attorney will walk you through the proper procedure and ensure that your contract has the necessary provisions in it to protect your rights.
Below are 3 important facets in a Missouri construction project: Time, Change & Termination:
1. Changes to the Construction Contract:
There is usually a provision in the construction contract which deals with changes or modifications to the scope of work or condition. If there has to be any change in the scope or price of the project, the owner must approve it prior the start of the construction.
See C.P. Jhong, Annotation, Effect of Stipulation, in Private Building or Construction Contract, That Alterations or Extras Must Be Ordered in Writing, 2 A.L.R.3d 620 (1965).
Article 7 of AIA Document A201-1997, for example, contains three classifications of amendments which each differ slightly:
- Change Orders
- Construction Change Directives.
- Minor Changes
This website briefly explains these concepts, but you should contact a St. Louis Construction Lawyer to learn more about your contractual rights in case a change is made to the construction contract.
2. Time of Performance:
If in the construction contract, no completion time is mentioned and a dispute arises regarding delays or timely completion, Missouri law expects that the construction will be completed in a reasonable time. See ArtCraft Cabinet, Inc. v. Watajo, Inc., 540 S.W.2d 918 (Mo. App. W.D. 1976). Failure to do so may give rise to damages claims from the party in the tier above on the construction project food chain.
A good construction contract, like AIA Document A201-1997, General Conditions of the Contract for Construction, uses the time between the commencement of the work to the time of substantial completion as the total amount of time for completion allowed for the contractor, with very few exceptions.
A good construction law attorney will include this type of provision into the contract, accounting for any anticipated delays or hiccups in the project.
3. 3 Ways a Construction Contract Can be Terminated:
Termination of a construction contract can occur in three ways at least:
- Termination for convenience without the fault of any of the parties.
- Termination by mutual agreement.
- Termination by performance one party because the material breach of the other party.
Before terminating any contract, it is important to know your rights. You can avoid exorbitant expenses if you follow the proper procedure before terminating. In order to know your rights and whether you have the legal right to terminate a contract, you should always consult with an experienced construction law attorney prior to making any drastic moves.
Any party who wishes to start a construction project in Missouri, should first devise a proper plan. This plan should include hiring a number of different people for the project, including
- a project manager,
- an architect,
- construction engineer,
- St. Louis Construction Lawyer (if it’s a Missouri project),
- finance manager.
There are so many moving parts on a construction project that its difficult to try to handle the legal aspects of it while juggling the other tasks. Contact a knowledgeable St. Louis Construction Law attorney to help you with contract negotiations, collecting on a job, or defending a consumer lawsuit.
If you hire an attorney, they will prepare a defense plan and it will increase your chances of success in the litigation. Or, at the bare minimum it will create leverage to resolve the dispute.
As we all know a significant amount of disputes arise during a construction project. If you retain an attorney before the dispute arises, you may be able to prevent it from happening in the first place. “An ounce of prevention is worth a pound of cure.”
Don’t let that phrase haunt you when your in the middle of an expensive lawsuit for something that a Construction Law attorney could have prevented by including a simple provision in the contract. Get your contracts reviewed by a local St. Louis attorney, so you’re in compliance with the applicable Missouri and St. Louis construction law.
If a dispute ever does arise, and the project is in Missouri, you should immediately contact a St. Louis Construction Lawyer who can guide you through the legal aspects of the contract.