Contractor-Subcontractor Disputes

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Contractor-Subcontractor Disputes

A contractor-subcontractor agreement should clearly state the roles and responsibilities of both the general contractor and the subcontractor. When the subcontractor contract fails to fully address accountability or one party violates the contract, it can cause a legal dispute. To avoid contractor-subcontractor disputes the most important step is ensuring your contractor-subcontractor contract includes the necessary provisions and legal requirements to safeguard your business and sustain the partnership.

Some issues are unable to be solved quickly using the contract therefore it requires legal action to resolve the problem and protect the general contractor from unfair claims. At MNCLS, we understand the conditional nature of the contractor-subcontractor working relationship and know how to strategically address the dispute. We work with our contractor clients to defend or prosecute the breach of contract that will be best for your business.

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PROCESS

What is our process?

Step One: Suing or being sued?

First, we have to determine if we are the ones suing or if we are the ones being sued. If we are on the offense, we spend more time on steps 2 and 3 to resolve the dispute or draft a plan. If we are on the defense, our time is limited and instead strategize accordingly.

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Step Two: The pre-suit dispute resolution

We take the best action that will benefit your business, or what MNCLS calls the “business solution.” We try to find a way to avoid a lawsuit (if we’re on offense) or end it quickly (if we’re on defense) by working with the other party to find a resolution. If a resolution is not possible, we move to step 3.

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Step Three: The planning, research, and drafting

After telling us more about the dispute, we dig deep into the provided documents and the law for extensive research. From there, we come up with our strategy for moving forward and either initiate or respond to the lawsuit. We also gather additional information or data for the case.

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Step Four: The discovery

After the lawsuit has begun, we start the process of finding out what the other side knows and the documents they have through written and in-person discoveries. The purpose of the discovery process is to gauge the opponent’s offense or defense to ensure we are properly prepared.

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Step Five: The motion practice

During the discovery process, we also enter into motion practice. Motion practice is where the attorneys are asking the court to do something, such as dismissing the case, asking the other side to produce a document or answer a question, or excluding a witness or document from the case.

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Step Six: The mediation

The court almost always requires an alternative dispute resolution. At MNCLS, we always participate in mediation unless arbitration is required by the court or the contract. Mediation is similar to our pre-suit dispute resolution, but it is done in front of a neutral party to establish a resolution without the use of litigation.

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Step Seven: The pre-trial

Pre-trial preparation involves not only preparing our argument for trial but organizing all of our court documents, providing our witnesses with notice, drafting our jury instructions and verdict form, and many other final details to prepare for a favorable trial.

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Step Eight: The trial

A trial can range from one day to several weeks. Most cases that we have are between 1-5 day trials. The number of days at trial depends on the dispute, whether we were able to narrow issues down through our motion practice and the number of documents and witnesses.

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Contractor-Subcontractor Disputes

Common Issues

Some common examples of contractor-subcontractor disputes include mechanics lien claims filed by the subcontractor, even if they do not have the authority to do so. Project interruptions include poor cleanup, delays in deliverables, or inadequate workmanship. We provide proactive measures, including subcontractor contract creation and review, and reactive measures, including resolution enforcement, that attribute to contractor-subcontractor contracts.

Does the subcontractor need to sign the subcontractor contract?

Your insurance company should require a signed copy of the contractor-subcontractor contract, therefore requiring the sub to sign the contract. If your insurance company does not require a copy of the subcontractor contract, it instead becomes an issue of poor insurance coverage.

For commercial construction, can I use my AIA subcontractor contract?

Yes, although you need to ensure the contracts support one another. The set of AIA documents consist of several contracts, all designed to work with one another. An AIA (The American Institute of Architects) subcontractor contract will reference provisions included in other AIA documents that, together, create the entire contract package. Using one of the AIA documents without using the entire package can create conflicts, what we call “Battle of the Forms,” which makes resolving disputes more difficult. Unless you’re using the entire AIA set, we don’t recommend using the AIA subcontractor contract. To properly uphold the contract in question, every contract needs to be consistent with one another.

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