In any business deal or transaction, there is a possibility that one side will not be able to deliver or meet its end of the bargain. Thus, drafting a legally sound contract to ensure that all parties in a business deal understand what is expected of them, such as the scope of the job(s), the cost and expenses and the payment schedule is very important. In the event that a business fails to deliver on its contract or does not receive payment on a completed job, legal action may be necessary.

Recently, a Gretna, LA construction company, which was subcontracted in December, 2011, to conduct earthwork on a project for a little over $2.5 million, sued its general contractor for breach of contract. The subcontractor claims that the general contractor owes it over $1.5 million.

The subcontractor notes that all work as prescribed under the contract was completed on January 24, 2013, but that they have not received full payment for their work. Furthermore, under the contract, they are entitled to a 15 percent charge on the remaining balance. In addition to the $1.5 million, the subcontractor is seeking attorneys’ fees and other costs associated with the legal proceedings.

Generally, a large construction project can potentially have several subcontractors and sub-subcontractors. Such large construction projects are often time-sensitive with specified deadlines. Legal issues and matters surrounding such multimillion dollar construction projects can get complex. Thus, when drafting a contract and forming a contractual relationship with another party on such projects, it is essential to have a solid contract in order to ensure that one is protected.

Source: The Louisiana Record, “Subcontractor suing contractor for $1.5 million,” Kyle Barnett, Oct. 12, 2013