Construction Dispute Law in Michigan
When the owner of some real estate and a contractor enter an agreement for a construction project in Escanaba, Michigan, be it a house, landscaping project, or massive office building, there's always a chance that problems will come up, no matter how careful everyone is. A few minor setbacks are almost inevitable, in fact.
In the majority of cases, it's possible for landowners and contractors to resolve disputes amicably. There are many ways to do this, such as a simple verbal agreement to lower the contract price due to a mistake made by the contractor, for example, or an agreement to a slight price increase in the event of unforeseen obstacles beyond the control of either party.
Even if disagreements can't be resolved amongst the parties to the contract, they don't need to take their dispute into the court system. For instance, construction contracts normally call for mediation or arbitration before any disputes are resolved by the courts. Mediation is a process by which a third party serves as a sort of intermediary in settlement negotiations between the parties to the contract. The mediator can help keep negotiations on track, and suggest possible solutions the parties might not have thought of. The mediator can't issue a binding decision, however. Arbitration is a process through which the parties agree to have their dispute resolved by a third party, which can render a binding decision. Arbitration can be faster and cheaper than litigation, and it has some other advantages, as well.
Because of the large cost in time and money involved, litigation in Escanaba, Michigan is considered a last resort. However, in rare cases, it does become necessary.
Examples of Construction Disputes That Might Lead to Litigation in Escanaba, Michigan
Delays: If the contractor is culpable in a major delay in a construction project (a delay of weeks or months, for example), a lawsuit could result. If the contract specifically states that completion by a particular date is very important, or the builder has a good reason to know this, a court will often award the owner compensation for any economic harm caused by a delay.
Owner's refusal to pay: Contractors can also be the victims in construction disputes. Sometimes, the person who hired them will refuse to pay the agreed-upon fee, or withhold a portion of it. This, without more, certainly constitutes breach of contract. However, in such cases, the owner will rarely go to court and say "I just didn't feel like paying, so I didn't." Rather, they will claim that they had a very good reason to withhold all or part of the payment, such as unsatisfactory work by the contractor. In these cases, the court has to determine if the owner has a valid reason for not paying. If it concludes that he or she does not, it will order the owner to pay the agreed-upon price.
Subcontractor Disputes: When a construction company is contracted to complete a large project, there is normally a great deal of specialized work to be done which they aren't equipped to handle. As a result, they hire other contractors, who, in this arrangement, are subcontractors, to do some of the work. However, the general contractor (the one that the landowner hired to do the work) is still responsible for the completion of the project - if a subcontractor causes a problem, the general contractor is on the hook for it. This sometimes leads to landowners suing general contractors for the mistakes of subcontractors. If the general contractor loses, and has to pay the client, the general contractor can then sue the subcontractor for whatever amount of money it had to pay.
Mechanic's Liens: Sometimes, when a contractor wins in a lawsuit against the landowner who hired him or her, and obtains a court order for payment, the contractor will still refuse to pay. Since a money judgment isn't worth much without a way to enforce it, the laws of many states have evolved to authorize what's known as a "mechanic's lien." As a last resort, if a landowner refuses to pay the contractor for work done on the property, the contractor can force a sale of the property, and keep the proceeds, up to the amount of money owed.
Can a Escanaba, Michigan Attorney Help?
If you have a construction dispute, you should first try to resolve it amicably with the other party. If this fails, it is almost always essential to hire an Escanaba, Michigan construction disputes attorney, who can advise you on the next steps in the process.