General contractors have many responsibilities during every project. From coordinating supplies, delivery and laborers to meeting permit requirements and customer demands, all while ensuring the project moves forward according to plan, the responsibilities are varied. Yet, each one of these responsibilities plays an important part in the success of the project. Somewhere in that tangle of duties falls legal responsibility. Many general contractors wonder what they are legally responsible for and how to protect themselves from legal liability.
Legal Responsibility And The Contract
As a general contractor your legal responsibilities are largely encompassed by the contract you enter in to with your clients. The contract is what initially defines the general contractor’s obligations in terms of performance, as well as the methodology for submitting and approving progress payments and final payment from the owner. Designing and adhering to the terms of contracts protects general contractors from liability.
As the general contractor, you bear the responsibility for making sure the job gets done to specifications. Plans and specifications can include architectural, engineering, and development plans, government building codes and ordinances, as well as general standards of construction processes applicable to builders. The contract will typically include these plans and specifications, which then clearly spell out what each party is responsible for doing or providing during the project.
As the general contractor, you are the one who enters into the agreement with the client and you are the one with overall responsibility for the project. As such, you hire all subcontractors and suppliers, which often requires separate contracts to be signed with these providers. Just as you can spell out your legal responsibilities through a contract with your clients, you can do the same thing with your subcontractors, suppliers or laborers.
It doesn’t matter if the contract is with a client or a subcontractor, a written contract is your very best protection against claims from dissatisfied subs and clients and protects you and your business from possible liability issues.
The Importance Of Contract Details
When it comes to contracts, details matter. You want your contracts to be as detailed as possible to protect your business from outside interpretations that could harm you. For example, vague wording about the type of materials to be used in the project can come back to haunt you if the client is dissatisfied with the end result. It is important to very clearly specify ahead of time, preferably in the original contract, exactly what type of materials will be used in the project. Wording such as “good quality materials” is very vague and subjective. What is “good quality” to the contractor may not be to the customer and that is where disagreements arise.
Other common areas of disagreement that can be alleviated through a good contract are: Pricing, Timelines, Payment Schedule and Terms, Guaranties and Warranties, Specifications and Scope of Work, Damage to Property, Termination and Conflict Resolution alternatives.
Getting Help With Your Contracts
Fortunately, you don’t have to create contracts yourself or hire an attorney to draft a contract for every project. The American Institute of Architects (http://www.aia.org/) has developed several standard forms of contracts for use between owners and contractors, as well as contracts for subcontractors, project managers, and design professionals. These can all be used in standard form or modified as desired by the parties.
The advantage of using AIA forms, at least as a starting point, is that they have been scrutinized and interpreted by the courts over many years and so there is more predictability in the event of a dispute between the parties.
Seeking The Right Legal Advice When You Need It
Construction Attorneys are knowledgeable about all aspects of construction law but also about how businesses involved in the construction industry operate. They are skilled in contract law, but also litigation and conflict resolution practices. A construction attorney can help you clearly define where your legal responsibilities begin and where they end.
For additional information about the legal responsibilities of the general contractor, contact our construction lawyers at Schlueter, Mahoney & Ross, P.C. Our attorneys can be reached by phone at (303) 292-4525, at our office, or by filling out the contact form on our Contact Us page.
Our construction law attorneys, Michael A. Schlueter, Elliot Fladen and Lisa C. Secor represent clients throughout Colorado, including Denver, Aurora, Broomfield, Boulder, Greely, Commerce City, Lakewood, Highlands Ranch, Littleton, Arvada, Westminster, Pueblo, Thornton, Colorado Springs, and Fort Collins.
Michael Schlueter