Posted in Business Attorney, Business Law, Contracts, Corporate Attorney, Corporate Law, Small Business, Texas
How to Settle a Dispute With Your Contractor, Without Litigation
Are you concerned about the quality of work delivered by your contractor? Maybe they are not following the scope of work you initially agreed to? Perhaps they’re taking twice as long as was agreed? Or maybe they’ve found some other loophole in the contract; some other way to take advantage of your business? If so, you are not alone; such disputes do arise from time to time in the corporate world between a business and its contractor(s). Ideally, every single contractor you ever hire will work diligently to deliver quality work within the designated budget. Perhaps most importantly, this “ideal contractor” will do so in a timely manner. Everyone leaves happy, and there’s no need to even consider going to court. However, this is not an ideal world, and things sometimes go sideways. Is the situation irretrievably poisoned? Is an expensive and time-consuming lawsuit the only option?? Fortunately, no! This where having a high-quality San Antonio Business Attorney on speed dial can save you. We can parachute in to help you avoid a costly mess and (hopefully) save the day. If a contractor’s job goes awry, your first priority must be to make as much lemonade as you can, from the lemons you have been given. What does that look like? And perhaps more importantly, how? Let’s dive right into it. STEP 1: READ YOUR CONTRACT; READ IT CAREFULLY; THEN READ IT AGAIN! The contract that you signed with your contractor may (should!) address certain significant aspects of the job, including the scope of work, the completion date and start date, and some sort of dispute resolution procedure. In the unfortunate event that your contract does not address these areas, buckle up and get ready for a wild ride. After that, remember to hire a competent Business Attorney to draft your next contract. Some of the common areas of dispute (which your contract will hopefully address) may include:
- Starting Date: unsurprisingly, this is the day the contractor is required to start the job.
- Completion Date: again, unsurprisingly, this is the date the contractor is required to complete the job.
- Material Costs: this clause will set forth who pays for material costs, and on what schedule they will be paid.
- Payment Schedule: when the contractor is paid – whether determined by time, completion percentage, deliverables, or any other metric. Some common options include:
- Full up-front payment
- Partial up-front payment, balance upon completion
- Progress payments according to percentage of completion, with retainage (common in construction)
- Progress payments according to specific deliverables (common in technology)
- Partial payments over a recurring schedule (common in time-limited, quasi-employment type contracting arrangements)
- The precinct in which you are located;
- The precinct in which the contractor is located;
- The precinct in which the project is located;
- A copy of the contract, including any amendments or addenda thereto;
- Written record or agreement on time and scope of work (with photos, if at all possible);
- Receipts of any purchased material;