On behalf of Kadish & Anthony Law Group posted in Construction Litigation on Friday, May 6, 2016.
A building construction — regardless of whether it is commercial or residential — is rarely ever completed by one contractor. Under ordinary circumstances, there is one general contractor on an Arizona construction job and numerous subcontractors who are brought in to perform certain functions, just as is the case in other states. Any disputes that subcontractors have with the general contractor, or vice versa, are sometimes settled through the filing of construction litigation.
When a subcontractor is brought in, a contract is usually signed with the general contractor and possibly others, outlining the services and materials that will be provided in exchange for an agreed upon payment. A subcontractor in another part of the country agreed to perform jet grouting under strict parameters on a project in exchange for approximately $40 million. Deviations were not accounted for in the agreed upon price.
Due to issues with unstable ground along the route of the Seattle seawall, the agreed upon jet grouting services were modified and changed nearly every day. As expected, cost overruns occurred, and the subcontractor kept the contractor up to date. When the general contractor failed to pay the more than $7.3 million, it was owed in costs over and above the contracted amount, the company filed a lawsuit.
Arizona construction contractors are aware that even if the contract does not speak to any changes that are required during the project, it is often necessary to perform the work anyway — especially if the changes and cost overruns go directly toward adhering to safety laws and construction requirements. However, that does not necessarily mean that a subcontractor should not be paid for any extra work done outside of the contract. If payment is not forthcoming, construction litigation might be required in order to resolve the situation.
Source: komonews.com, “Seattle seawall project subcontractor files $7.3M lawsuit”, April 25, 2016