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Construction Litigation

Calgary Construction Lawyers

Albertans take pride in building our province both above and below ground. At Carbert Waite LLP, we serve the people who make it happen. From the architects, engineers, planners, and developers who shape the project, to the material suppliers, construction managers, and trades who bring it to life, our experienced construction lawyers serve a full range of clients across construction sectors.

Serving Alberta’s Construction Industry

We approach construction matters by understanding the relationships, timelines, dependencies, and professional standards within complex construction projects. From the first CAD to the last weld, our lawyers are equipped to provide practical legal advice every step of the way. We combine extensive construction law experience with old fashioned hard work to protect our clients’ profitability and keep their projects on track.

When legal disputes emerge, our construction lawyers are prepared to resolve disputes as pragmatically as possible, using the legal tools best suited to the job — through negotiation, mediation, arbitration, and/or litigation. Completing successful construction projects requires anticipating problems and preparing alternative strategies to see the project through. Our legal work is no different.

Construction Law Services

  • Bidding, tendering, and other pre-construction matters
  • Builders’ liens
  • Building envelope claims
  • Contract disputes
  • Contract drafting and interpretation
  • Coverage advice on first party and third party insurance issues
  • Defective workmanship, faulty design, and product liability
  • Delay and cost overruns
  • Development disputes
  • Expropriation claims
  • Negotiating, preparing, and reviewing contracts
  • Occupational health and safety
  • Project strategy and risk analysis
  • Receivership, bankruptcy, and trust claims
  • Regulatory approvals

My project is delayed, can I sue, be sued, or be compensated?

Project delays are a common source of disputes during construction projects and can create significant liability on all parties involved. Each dispute is different but at a high level, there are four primary factors that determine whether a party can sue, be sued, or be compensated when there is a delay to a Project:

  1. What does the Contract say about delay; and
  2. Who caused the delay?
  3. Has someone actually suffered a loss as a result of the delay?
  4. What caused the delay? Was it due to negligence, mistake, poor work/inefficiencies, or simply bad luck (i.e. weather)?

Construction contract often describe what happens if there is a delay and if there is a clause in the contract, the terms of that clause will usually govern what happens if there is delay. Therefore, it is important that you review the terms of the Contract to see what impact the delay may have on your rights.

Often, the party who caused the delay will be responsible to compensate others for the losses from the delay. Owners and General Contractors will often seek to reduce amounts otherwise payable to a Subcontractor if the Subcontractor causes the delay. However, Subcontractors generally have a difficult time seeking compensation from Owners or General Contractors who delay the Subcontractors start-time.

It is important to determine whether the delay has actually created a loss. In other words, has the delay actually delayed the Project as a whole? In many cases, Projects timelines add buffers between various elements so a delay may not have any actual impacts on the Project as a whole.

While any delays could create liability, it is generally only those delays caused by negligence, mistake, or poor work/inefficiencies that create liability. It is important to compare the actual completion time with the Project deadlines and determine the cause for the delay.

For better or worse, project delays are a common occurrence. The key issue is determining the actual impact of the delay and why the delay occurred.

The lawyers at Carbert Waite LLP have significant experience dealing with delay claims in construction projects and can assist in determining your rights in the event of a delay.

 

My contractor is doing a poor job, can I terminate the construction contract and replace them with a new contractor? 

There are three key issues to consider when thinking about firing a contractor:

  1. What does the Contract say about termination?
  2. How significant are the deficiencies and has the current contractor been given an opportunity to remedy the deficiencies?
  3. What is the actual, on the ground cost, of termination?

The starting point is the construction contract itself, which often describes how either party can terminate the contract. Before entering into a construction contract, review the terms relating to termination carefully so you understand whether you have the right to terminate the contract early. Contracts generally require an owner to issue a Notice of Default to the contractor. Notice of Default gives the contractor formal notice that unless they address the owner’s issues, the owner will respond by terminating the contract early.

The law generally expects contractors to meet basic industry standards and meet all regulatory Codes. Contracts can also impose more stringent standards on contractors. However, owners generally cannot demand a greater standard than what is called for in the contract.

However, the standard imposed on contractors is not perfection. Contractors are allowed to make mistakes and are entitled to an opportunity to fix their mistakes. The law expects contractors to remedy deficiencies and expects owners to give contractors the opportunity to do so. The mere existence of deficiencies or poor workmanship will not justify contract termination (in most cases).

If an owner terminates the construction contract without giving the contractor the opportunity to remedy deficiencies, the owner may be responsible for the costs of repair. There have been many cases where owners have gotten fed up with their contractor, fired him, and hired a replacement contractor to fix the first contractor’s work. The owner was responsible to pay the first contractor for the work performed up to termination and pay the replacement costs of the second contractor. The owner was forced to pay twice because they failed to give the first contractor the opportunity to remedy their deficient work.

Replacing a contractor is often the most expensive and risky response. Once the contractor leaves the site, you lose all the knowledge that contractor had, including details of existing deficiencies that may not have come to your attention. Once the contractor is fired, you will likely be left asking yourself “What was my contractor thinking?”. A better option may be to reduce the contractor’s scope of work, involve a third party to identify the deficiencies, and give the contractor clear instructions of what they must do to remain on the project.

Some key take-aways:

  • Contractor mistakes are usually not enough to justify terminating a construction contract. Most of the time, an owner must give the contractor the opportunity to correct or remedy their work.
  • Poor workmanship can justify reducing the amount payable to the contractor. Most of the time, the costs of remedying deficiencies will be paid out of the contractor’s pocket and reduce the amounts otherwise owing.
  • Think twice before terminating a construction contract. Firing the contractor may seem like the easier approach, but often leads to more costs, delays and hassles.

Construction Progress Billings and Deadlines to Sue

In large construction projects, many contractors and sub-contractors issue progress billings over the course of the project. For particularly long and complex projects, a single contractor may issue progress billings for many years.

Anticipated Changes to the Alberta Construction Industry through Prompt Payment Legislation

The Alberta Government is proposing significant changes to the Builders’ Lien Act that will change the Alberta construction industry. On October 21, 2020, the Government introduced Bill 37, the ‘Builders’ Lien (Prompt Payment) Amendment Act, 2020’ designed to speed up the flow of cash on construction projects, extend deadlines for filing builders’ liens, create new way to resolve disputes, and reduce the risk of non-payment of invoices.

Builders’ Liens – Not Always the Best Remedy

Builder’s Liens are remedies meant to protect the interests of general contractors, subcontractors, material suppliers, or anyone else who provides goods and services to improve lands (“Contractors”).

Subcontractor Disputes under $50,000: Should I File a Builders’ Lien or Sue in Small Claims?

When it comes to construction projects, things don’t always go according to plan. This is especially true for residential property renovations. Unhappy customers often withhold payment, which is why contractors, subcontractors, suppliers and labourers can file a builders’ lien to get paid for the work they have done. By registering a builders’ lien, you register a legal interest against the property where the work was done or where the materials were supplied.

Don’t Take Their Word For It: Latent Defects And Why Disclosure Obligations Are Of Limited Value

Case-law is replete with examples of the application of the Latin doctrine caveat emptor (buyer beware) which in plain language means the purchaser is solely liable for determining defects upon purchasing property.

Planned Overhaul to Alberta’s Builders’ Lien Act

The Builders' Lien Act does not currently have clear payment timelines which has led to uncertainty and unnecessary lawsuits in the industry. This blog discusses the proposed updates to the act.

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Carbert Waite LLP