Many people assume that once they sign a contract, they cannot amend or change the agreement in any way. But what if you or any of the other entities that signed the agreement made a mistake when listing your personal or job-specific information. These mishaps can cause disputes or even invalidate the contract, leading to both costly and time-consuming litigation. Below are the most common and effective ways to deal with misinformation in a construction contract.
Issues from Bad Information in a Construction Contract
Misinformation in construction contractors could be found immediately after the contract is signed, during the project, or once the project is complete.
While each of these scenarios can occur, it is most common to be midway into a project when you find out that one or multiple pieces of information in the construction contract was incorrect. For example, say you sign on to a project as a subcontractor and begin to purchase materials and line up your manpower. To protect your payments, you send out the necessary preliminary notices.
A few weeks into the project, the general contractor calls you up and says that your preliminary notices were no good. This could be from a simple error such as a misspelled name or incorrect address. No matter the cause, even though you have completed your work and done everything else correctly, you could lose your payment protection. This is an extremely scary situation, and if you file a mechanics lien with incorrect or outdated information, the situation is even worse.
While many contractors and subcontractors are familiar with this reality, material suppliers are even more susceptible to incorrect information on a contract as they deal with lots of subcontractors at a given time.
How to Avoid Contract Misinformation
In most cases, contract misinformation simply consists of spelling mistakes or unknown outdated information. For example, owners can change mid-project, general contractors can be removed or replaced, or job sites can change addresses. Thus, as a subcontractor or material supplier, you must be sure that you are not signing a contract that is utilizing outdated information. In certain instances, this misinformation could stem from dishonesty, however, in most cases, it is simply a product of a mistake.
Whatever the case may be, you should do your due diligence before signing a contract. At the bare minimum, find out the owner’s information, as this could help you receive all the other information you need. While some of this information can be found online, the most direct step you can take is to stop at the county assessor’s office and inquire about the project. If the state you are working in uses a notice of commencement, the project and property information will be in this document.
The notice of commencement is also typically required to be posted on the job site. However, if you have not yet been hired on the job, you may not have access to the notice.
What to do If You Have Already Signed a Contract
If you have already signed a construction project before discovering your misinformation, your options largely depend on the stage of your project. However, you will have the most flexibility if you have not yet started working on the project. On the other side, once you begin working on the property or have completed the project, your options are more limited.
When you Haven’t Stated a Project
If you have not yet started the project, you will likely be able to fix the contractual issues. The reason for this is that the preliminary notice deadline window starts from the first date of furnishing. You can send the proper preliminary notices at any time between your first improvement or material delivery on a job. If you have not started working yet, you can also amend or replace the missing or incorrect information. This is true as long as both parties agree to this track.
Finally, courts have the ability to reform contracts. However, if it is a simple misspelling or wrong address, the court will be unlikely to take your case. However, if a case of fraud or other egregious issue occurs, the courts may step in to remedy the issue.
When you are on the Site and Working
Once you are already working on a job, you must check your state guidelines concerning the issue. If you can still send a preliminary notice, you will likely be able to revise the correct contract. In most states, you will have 20 days to resubmit a new notice. However, you must check your state’s regulations.
In other cases, states may use a sliding scale of protection. Thus, if you are outside the initial window of protection, sending a preliminary notice will protect your money from that date backward.
When you Complete the Job
Many subcontractors do not work on a job site for very long. Thus, you may finish all your work yet still be within the timeframe to send a preliminary notice.
If you did not send a preliminary notice and already finished your job, you cannot file a mechanics lien. If this occurs, the only way that you can receive payment would be to take your case to formal litigation.
One important note is to still send your preliminary notice. By showing that you have attempted to recover the money, the courts will be more likely to side with you.
Final Thoughts
Hopefully, you were able to catch the misinformation in the contract before you began working on the project or at least get through the project with no issues with payments. However, if you do run into issues, Antonoplos & Associates group of attorneys have over 20 years of experience guiding construction companies through legal issues. As such, our attorneys can deal with a variety of issues occurring during construction litigation.
Contact Our DC Law Office for More Information
Finally, for more on what to do when construction contract information is wrong, contact us at 202-803-5676. You can also directly schedule a consultation with one of our skilled attorneys. Additionally, for general information regarding construction law, check out our blog.