A contract is an important legal document. It establishes the relationship and expectations of two or more parties regarding a shared project or goal. At their core, contracts, also called agreements, are based on offers, acceptances, and consideration for performance of their terms.

In the construction world, contracts exist between many different parties. Design professionals may contract with developers to plan new homes or communities. Developers may hire contractors that may hire sub-contractors to perform the work that must be completed to bring the projects into fruition. The laws of both California and the federal government can impact how contracts are formed and executed.

The contracts that exist between parties working on construction projects can provide insights into how and with whom liability may rest if claims of construction defects are made. This post does not provide legal advice and all construction defect questions should be directed to construction law attorneys.

Scope and liability in construction contracts

When a construction defect arises, a strong contract may protect a party from liability, even if they were involved in the development of the affected project. For example, an architect who designs a building may, through their agreement with the owner of the project, disclaim liability for defective products used in the project since the selection of materials may have been the duty of a contractor. Similarly, the mistakes of a subcontractor electrician may not ultimately fall on a project owner if the agreement to perform work was made by the subcontractor and a contractor.

The threat of misrepresentation

Misrepresentations in verbal and written agreements can be difficult to overcome when construction defects come up. A misrepresentation is a false statement that entices a party to enter an agreement. Alleged misrepresentations made by developers and design professionals can affect projects from the top down and may impose liability on many parties involved in the process of building a construction project.

Reviewing contracts before construction begins can be a useful way to avoid problems later on. When construction defect challenges do arise, though, legal support from construction and real property attorneys can make a difference for developers, contractors, designers, and others.