Baton Rouge Business And Construction Law Blog

What is a construction defect?

The state of Louisiana and municipalities throughout the area impose building standards on contractors and other developers to ensure the quality and safety of the structures they build. When their homes, offices, and other buildings meet these standards, their buyers are provided with structures that will meet their needs and withstand time and other factors. If contractors fail to meet these standards, they may be liable for the defects present in their products.

A construction defect is a mistake or problem in a construction project. These defects can be big or small. For example, the failure of a contractor to properly lay the foundation for a home may result in the catastrophic loss of the structure; however, chipped paint or popped nails may also be construction defects, though these are easier to remedy.

There are various types of corporations in Louisiana

Some entrepreneurs in Louisiana may decide they want to establish a company in the state, and some of them may decide they want their business to be a corporation. However, under business law, there are various types of corporations to choose from. Thus, before making any decisions regarding corporations, it is important to know what your options are.

First, there are general corporations. These corporations are owned by an unlimited number of stockholders but are a separate entity for legal purposes. This means that stockholders are generally not personally liable for the debts of the company. Stockholders can sell their shares of the corporation, and, if the ownership of the corporation changes, the management of the corporation does not also have to change. However, general corporations must comply with various Louisiana and federal laws and regulations.

Are contractors always liable for construction defects?

While most parties to a commercial construction project want to ensure they do their best work, sometimes mistakes or omissions are made. These errors could lead to construction defects, which could lead to slow-downs in the project or expose certain parties to liability if the defect is not discovered until after the project is complete. It is important for contractors in Louisiana to understand when they may be liable for construction defects.

Contractors, along with subcontractors and designers, could potentially be responsible for construction defects. In general, the property owner is not liable for construction defects. Contractors have a standard of care to uphold. They have the duty to do their job while strictly following the contracts they have with the designers, subcontractors and project owners. Contracts are the cornerstone of most commercial construction projects, so it is essential that the contractor ensures that any contracts they execute are in their best interests and contain clauses that explicitly state what the contractor wants.

Mechanic's liens may be an option when contractors are not paid

The many parties to a construction project -- project owners, contractors, subcontractors and suppliers -- generally contract with one another to provide goods or services in exchange for payment. It would be nice to think that all construction projects in Louisiana run without a hitch and everyone is paid on time. However, this doesn't always happen. There are legal remedies for this, however, including the filing of a lien.

Essentially, a lien is a legal claim a person or organization has to a piece of property, to recover unpaid debts if the property is foreclosed upon. Specifically, when it comes to construction law, if contractors are not paid what they are owed, they may file a mechanic's lien against the property. A mechanic's lien can also be filed if a contractor does not pay subcontractors.

Is an LLC the right type of business for you?

You've had the entrepreneurial bug for a while now. You're finally ready to take the plunge and start your business. How do you begin?

You may have heard or seen the phrase "LLC" or "Limited Liability Company" in your preliminary research. But what is it? Is establishing an LLC the best for your new business?

Who is liable for contractor negligence under construction law?

We would like to believe that most construction projects in Louisiana will be completed without a hitch, but construction work can be dangerous, and it is not uncommon for a worker to be injured on the job. Specifically, when it comes to independent contractors, it is important to understand who is liable for injuries workers suffer while performing their job duties.

In general, the business that hires the independent contractor will not be liable for injuries suffered by third parties caused by the negligent acts of the contractor. This is because the contractor has authority over the work they do, and, thus, has an obligation to make sure the work environment is safe. If a third party is injured due to an unsafe work environment that the contractor controls, the contractor may be held responsible.

What constitutes breach of contract?

A company owner has contracted a building company to construct a new warehouse. The owner and general contractor have set a completion date for the project. The owner has an opening date and has made supplier arrangements to deliver product to the new location at a specific time and date. The company owner schedules delivery of office furniture and warehouse equipment by the agreed upon completion date. The problem is the general contractor and the subcontractors have not completed the project on time. There’s been delays, and now there are serious consequences.

When circumstances such as these culminate, Louisiana law allows you to hold contractors, suppliers, owners and subcontractors liable for breaching the terms of the contract. In these cases, a written contract has established the design, construction parameters, goals and deadlines, but these conditions have not been met.

How do estimates differ from bids under construction law?

The average person in Louisiana might use the terms "estimate" and "bid" as synonyms. However, when it comes to construction law, these terms have very specific meanings, as they refer to different steps in determining what the contractor's costs will be, and what the contractor will ultimately charge for their services.

Estimates are essentially costs incurred for completing the project the contractor is being hired to do, such as materials and labor costs. These price estimates are informative to project owners, but they do not constitute a binding contract between the parties. Estimates that a contractor presents to a project owner must be reasonably accurate. There may be preliminary estimates, square foot estimates, assembly estimates and ultimately, the final estimate.

We assist Louisianans with their business law needs

Many people in Louisiana have a strong entrepreneurial spirit that contributes greatly to our state's economic success. However, starting a business involves more than just a good idea. There are many steps in the business formation process that must be followed for a business in Louisiana to both comply with the law and be successful once it is up and running.

For example, certain businesses, such as corporations and limited liability companies, must have bylaws and register with the state. Certain businesses, such as bars and restaurants, may need to obtain licenses to operate. Businesses may need to establish trademarks as well as develop business models. Some business owners choose to franchise. Basically, it is prudent to ensure that your business has met all the necessary legal requirements before opening its doors. The failure to do so could negatively affect the very viability of your business, sometimes before it even gets off the ground.

Patent versus latent construction defects

A construction project in Louisiana can be a complex affair involving many parties doing many different tasks. As such, it is sometimes the case that construction defects occur. A construction defect is something that goes wrong in the construction process that causes some aspect of the structure to fail in a way that causes another party to suffer financially.

In general, there are three elements that must be present for a construction defect to exist. First, there must be a deficiency in the construction process itself. This could take the form of a bad design, damaged materials or poor workmanship. Second, this deficiency must cause the structure to fail in some way. Finally, that failure must lead another party to suffer financial or other damages.

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