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Construction Contract Law

Construction contracts are legal documents that stipulate the agreed terms between an owner and a contractor. These provisions can include the construction, alterations and/or the repair of a building or structure. These construction contracts are guidelines that allow for all sub contractors to be paid by the contractor as well as determining when a construction job is to be completed. To learn more about construction contracts, look at the questions below that have been answered by Experts.

In a construction contract, which holds more weight, plans or specifications?

Usually, if there is nothing in the contract that says otherwise, the plans will hold more weight. This is true only when the plans focus on an issue or the plans specifically say that the specs hold more weight. If there is no direct language within the contract that will states that one is more important than the other, you would interoperate the document that is more specific as the document that would govern over the other. This is only if the document doesn't conflict with the other documents.

Does Alabama law require an owner, engaged in constructing a building on land, to hold back any part of the contract price from the general contractor for any specified time pending possible Construction Lien claims?

Although this clause can be included in any construction contract, there is no law that requires such steps. Usually, in a situation like this, a contractor may be denied payments until the contractor can provide written statements from suppliers and sub-contractors stating that each has received money for their services. This will usually stop any future attempts to place a lien on the grounds that they have not received payment. Most reputable general contractors will have these standard forms on hand.

While most general contractors are honest, there are many who fail to pay their sub contractors. This usually results in the sub contractors filing liens, which leaves the owner responsible for paying the debt even after they have paid the general contractor for these fees.

I'm having a vacation home (cabin) built in NC and the builder has missed several completion dates. I've had to get the bank construction loan extended once and am afraid that the builder will not complete the work as the next maturity date approaches. What legal rights as a homeowner do I have?

Usually, there are clauses in the construction contract that covers this type of situation. Without these provisions in the contract, the builder is within their rights to work at their own pace. You need to read the construction contract and look for any clauses that may address this problem. Aside from this, your other option would be to ask the general contractor for a realistic completion time. Once you have this, you can then approach the bank with the timeframe and work with them on an extension.

If a general contractor signs a contract to be responsible for all repairs of a home up to one year after construction, but is no longer in business, is he still responsible?

Usually, if you have a construction agreement that is signed by the contractor that states he/she is responsible for all repairs that are reported within one year, you should be able to file a claim against the contractor in small claims court if the contractor doesn't honor the agreement. Usually, after a contractor has been served papers to appear in small claims court, they are more willing to take care of the situation out of court. This is usually more so if you have an attorney representing you.

Understanding the importance of a construction contract is important to any owner. There are laws in place to protect all parties, but understanding the implications of the law can depend on the location and the case details. If you unclear of your rights or have legal questions regarding construction contracts, you should ask an Expert.
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