Another Reason to be Careful Before Walking

We have discussed issues that may arise in the context of a residential construction project.  Because most homeowners are not sophisticated in the ways of construction (and really shouldn’t be) expectations are key and keeping your nose clean as a contractor is key.  Courts in some instances will lean toward the party that they deem to be less sophisticated, i. e. the homeowner, so doing anything, such as walking from a job under anything but the worst circumstances, can be very detrimental after the fact.

Recently, the Norfolk, Virginia Circuit Court gave us another reason to stay on the straight and narrow.  In Builders By Design v. Wilson the Court looked at a relatively typical scenario in residential construction.  The Wilson’s contracted for the construction of an addition and renovation to their home.  During the course of construction, changes to the scope and price of work took place with more or less contention.  Without any warning and before the construction was complete, the homeowners sent an e-mail to Builders By Design stating that it should cease work and not enter the property without the Wilson’s express written permission.

Of course, the Wilsons had not paid what was owed Builders By Design for work done to that point of the project.  Needless to say, the contractor sued and the homeowners defended and counterclaimed stating that the work was not performed properly.

The Court entered judgment for the builder.  The Court stated that the contractor performed according to the contract, depending on the various passed inspections by the city inspectors office.  Furthermore, the Court stated that the Wilsons never told the builder that there were issues with construction and they did not find out about any alleged issues until after terminating the contractor.  Under these circumstances, the home owners were in first material breach of the contract and therefore the builder wins.  As always, I recommend that you read this case for more details.

The takeaway?  Homeowners should be careful when terminating a contractor and assure that they have proper cause aside from angst due to negotiation of change orders.  Homeowners certainly should not forbid a contractor from attempting to remedy any issues.  Contractors should correspondingly be careful before walking from a project no matter how crazy the circumstances.  This case from Norfolk shows that the one in first breach is the one that will suffer in the long run.

If you find yourself in an unworkable situation on a residential (or commercial) job site, be sure to consult an experienced construction attorney prior to taking any drastic action regarding the termination of the contract by either the home owner or contractor.

As always, I welcome your comments below.  Please subscribe to keep up with this and other Construction Law Musings.