Construction Law Newsletters
General contractors (aka prime contractors) do not normally perform all the work on a construction project. Rather, it is parceled out to various subcontractors with specialities in the necessary areas. In order to submit its own bid to the owner for a construction project, the general contractor will utilize the chosen bids from each of the subcontractors.
In most states, contractors, architects, and engineers are required to be licensed in order to perform construction work. Some states have enacted statutes that provide exemptions for license requirements. However, these exemptions are extremely limited and are strictly interpreted by the courts.
Some terminations of a construction contract are justified. However, a party who wrongfully terminates a contract will be found to have materially breached the contract. When a wrongful termination occurs, the non-terminating party may pursue various courses of action for a recovery.
Oftentimes, a construction contract will include a provision allowing for its termination by one party should the other party abdicate specified responsibilities thereunder. With such provisions, the magnitude of the abdication and its affect on the contract are largely irrelevant. With contracts that do not contain such a termination provision, rightful termination can still be accomplished should the other party materially breach the contract.
Construction defect litigation has grown substantially over the past decade, with two major areas of litigation being pursued. Generally, construction defect litigation first takes the form of a lawsuit for damages being brought by a homeowner's association on behalf of its residents or by the residents themselves. The second layer of construction defect litigation focuses on insurance coverage.