All About Contractor Disputes
That’s when a conflict with your contractor can either be avoided or resolved. The main issues that tend to come up are delays, cost overruns and poor workmanship, all of which are expensive and frustrating for homeowners. Many times contractors and homeowners have different perceptions of the "contract" and what the expenditure will be.
Another common disagreement between your contractor and you is the scope of work , how long the work will take and whether it was completed in accordance with the approved plans and specifications. A contractor can create extra work if the plans are poorly, incompletely or incorrectly drawn. If your contractor is not responsive to your requests or problems, then its time to think about getting a good lawyer.
When Is a Good Time to Sue
While our hope as lawyers is obviously that we can resolve the legal issues facing our clients without resort to a law suit, there are some scenarios where a lawsuit is necessary. The contractor simply refuses to make things right. Here are several factors that we look at in deciding whether to terminate negotiations and pursue a lawsuit against your contractor:
Lawyers charge by the hour (at least those of us who are not on a contingency fee), and they must charge you for the time they spend evaluating the viability of any potential case they are handling. This means that if you walk into our office, we will start charging you for our time; however, you won’t be charged for that time if you do not retain us. Like doctors, lawyers hope you don’t need to see us again, but we understand that sometimes it is necessary. That is the reason for the initial consultation. We will review whatever documents you may have regarding the transaction and roughly estimate the time it will take to complete the entire case and the amount of fees and costs you can expect. We will also evaluate any counterclaims that your contractor may bring if you sued them, and the value of those claims as well. If we believe you have an actionable case, then we will advise as to whether you should pursue a settlement or proceed with the suit. If we believe your case has little chance of success, we will advise you NOT to sue.
So, when it comes down to it, there are three issues that you should consider in determining if you should sue your contractor:
In the end, this is YOUR decision. We will provide our opinion(s) but you should make your own decision. Hopefully, this guide will help you do just that!
Legal Reasons to Sue a Contractor
There are a variety of legal reasons a homeowner would have to sue an Illinois contractor. From a breach of contract claim, to a negligence claim, to fraud, there are a wide variety of avenues for recovery available to a homeowner against an Illinois contractor.
One of the most common sources of recovery for homeowners is a breach of contract. A breach of contract can occur when the contractor fails to complete agreed upon work, and/or the work performed does not comply with building code or otherwise comply with what was expected based on the agreement between the parties.
Another source of recovery can be based on negligence. A construction negligence claim can occur when a contractor fails to use the proper care when performing the work contracted for, and this lack of care causes damage to the home. In such a scenario, there may be a claim for jury awarded damages based both on the cost to fix the issue, and on the difference in value of the home, as measured before and after the allegedly negligent work was performed.
The most serious claims against an Illinois contractor arise out of fraud. Unfortunately, fraud by contractors is not uncommon. There are many types of construction frauds that have been perpetrated on unwitting consumers by unscrupulous contractors. A common example of fraud that occurs is when homeowners hire a contractor purporting to be licensed , and/or with promises that they have the necessary skills to competently perform the work, when in fact the contractor is unlicensed and/or lacks the necessary skills to complete the work.
Your Other Options
When it comes to contract disputes with your contractor, litigation is not the only option available. Non-litigation methods like mediation and arbitration can also prove effective, and have their own unique advantages. Mediation is a type of alternative dispute resolution where you and the contractor hire a third-party mediator to listen to both sides and come to a reasonable compromise. The mediator does not have to be a lawyer, but if they do not practice in Minnesota, they will not be able to unilaterally agree to modify your contract. Mediators charge for their services by the hour and generally require parties pay up front for a certain number of hours. You can add more after that if necessary. If the mediation is successful, each party may pay for half of the fees, but if it is not, the party who requests the mediation is generally responsible for all fees. Successful mediations often end with both parties signing a written agreement, either in a final settlement agreement or a memorandum of understanding. Arbitration is similar to mediation in that it does not require you to go to court before you can resolve the issue. Unlike mediation, however, arbitration does not require both parties to agree to an outcome. Instead, each side generally has the right to present its case and evidence to the arbitrator, who then decides the outcome. You may request binding arbitration, which means that you agree to accept the arbitrator’s decision as final, or non-binding arbitration, which means you can reject the arbitrator’s decision if you do not agree. The arbitrator will also decide who is responsible for the arbitration expenses. Arbitration is usually faster than litigation, but that also means you get less choice in the outcome. You can also expect to pay more in arbitration fees than if you go through the judicial system.
The Pros and Cons of Suing a Contractor
Suing a contractor isn’t always the most viable solution, so you need to weigh the pros and cons of doing so before spending your hard-earned money both in legal fees and in court costs. The ability to sue a contractor isn’t always guaranteed as well; if the contractor has done the majority of the work they were paid to do and it’s determined that the remainder isn’t technically "work performed", then you won’t be able to sue for work not done.
The costs of suing a contractor can be less than or more than what you paid the contractor, and it all depends on the amount of damage you’ve suffered. If the damage is under a couple thousand dollars, then you can probably get by with filing a small claims court case. Unless you’re a contractor yourself, representing yourself in court can be risky, though, and you may want to consider having a lawyer draft your pleadings and go with you when you file your lawsuit. If you decide to hire a contractor, the legal fees could easily run you upwards of $5,000. At the end of the day, small claims court may be the best option if you’re unable to resolve your claim. If your claim is more than $15,000, then small claims court isn’t a viable option.
It may take months or even years to go to trial. Small claims court hearings are generally heard within 1-2 months of when you file, but district court will range from 1-2 years before your case is heard. This may or may not be an issue; money and time spent figuring out your problems with the contractor may be worth moving the suit forward to resolve any issues.
If you do win money from the lawsuit, you may not actually be able to collect the money from the contractor. Winning a judgment doesn’t guarantee that the contractor is able to pay the amount you’re awarded. Many contractors don’t keep large sums of cash on hand, especially if they’re getting by on slow payments. You can try to take immediate action by garnishing their wages or placing a lien on the contractors property, but the money is still not guaranteed.
How to Prepare for a Lawsuit
Before you embark on a legal battle with a contractor, you need to verify that your complaint isn’t frivolous. Review your contract carefully with a fine-tooth comb; ensure that you’re not, for instance, being punished for not paying a bill for work that you asked them to do last-minute and did not include in your original Perry Contract. Make sure that you have all your documents organized; you are going to need things like:
- Copies of the Perry Contract
- Copies of all work orders
- Copies of all invoices
If you have already paid the contractor, you will also need:
– Copies of cancelled checks .
– Copies of credit card bills.
If it’s a credit card charge, you might be able to get the amount reversed — but you will have to prove fraud with the bank. You will NEED an attorney. As a lawyer, I even have an attorney. When preparing your story, make sure that you don’t accuse the contractor of things that you can’t prove. Be honest and tell your lawyer exactly what happened. If you have paid them anything, they will have proof that you paid it, and you don’t want to come off looking shady or untrustworthy.
When Do You Need a Lawyer?
At the end of the day, while you may be tempted to file a case yourself, it’s always better to hire an attorney. You are not a lawyer and do not do this for a living (good for you!). Unfortunately, that means that hiring a professional is generally in your best interest. It’s difficult to understand all of the various rules and regulations surrounding lawsuits. A lawyer can help you with that.
When deciding to not hire a lawyer you should always keep in mind that it’s not really "handling it yourself." The simple fact of the matter is that the other party has an attorney. They are already at a significant advantage. If they have an attorney, how could you not have one too? To put it simply: you need a lawyer on your side.
Something else to avoid when you are thinking about not hiring a lawyer for your case is listening to your family and friends. They are not lawyers, and most likely don’t have any experience in personal injury cases. Their opinions are not very valuable and can often be harmful to your case. With all of this being said, what if you genuinely believe that you do not need a lawyer? Could you be right?
Everyone is entitled to their own opinions, if you believe that you do not need to hire a lawyer for your case, you may be right. But is that the logical thing to do? Unlikely. But if you and your family/friends truly believe that a lawyer is not needed and your case is simple enough to handle on your own. That is your own personal business.
You should always think about who is on your side and who isn’t. A lawyer is always on your side, whereas the other party is looking out for themselves. Personal injury cases are always complicated, as there are always numerous parties involved. At the end of the day, it’s about making the most amount of money by any means necessary.
You will always have a better outcome with a lawyer who is fighting for your best interest. It is important to remember that the insurance company has a lawyer on their side. And they are working hard to get out of paying you what you deserve. Even if you don’t settle, all of the offers will have to be approved by a lawyer.
What to Expect During a Lawsuit
After you’ve settled on suing your contractor, your first step is to file a complaint with your state or local government. Despite sounding simple, this too can be a time-consuming, tedious process. Your complaint should clearly lay out your demand from your contractor, which as mentioned above should be expressed in monetary terms. Once the complaint is filed, the court will issue a summons to the contractor informing them of the legal action taken against them.
After being served, the contractor has 21 days to respond. Whether they acknowledge that they owe you for damages or not, you’ll still have to attend a case management hearing that the court will schedule.
From there, both parties will agree to a timeline to complete "discovery." Discovery is exchanging information between both sides (this could be documents, interviews, or depositions), which usually happens within 30-90 days, depending on the complexity of the case. A day before the deposition involving one party, the opposing party will file a notice of deposition with the court.
These are usually closed-door affairs, only involving the parties with their respective lawyers, and a court reporter. The deposition will consist of your lawyer questioning the deposed party along with taking a transcript of everything for the purpose of possible impeachment at trial or a future settlement. A deposition doesn’t mean the party has been deemed guilty, however, and it does not necessarily lead to a trial. If it does, both parties would likely agree to a settlement based off the deposition and pretrial preparation. This would probably be the most convenient of all outcomes for everyone involved.
Conclusion: Making Your Decision
The bottom line is, suing your contractor for work is not a decision you make lightly. Any dispute put in the hands of a judge will never be fully resolved to your satisfaction, even if you win. Yes, you may get a judgment or verdict that legally "wins" you the money you were asking for, but the truth is that a lawsuit can stretch on for many months, or even years. The money you win won’t arrive for quite a long time, and you almost certainly won’t be able to collect on it immediately when it does. Part of the trouble with lawsuits is that the winner has to deal with the reality of their win. Sometimes, even when you "win" you don’t come out ahead.
For example, suppose you sue your contractor for bad work. Suppose your lawyer says you’re "guaranteed" to win, so you hire him for 40% of the total you stand to gain if you win. So say you stand to win $10,000, thus paying your lawyer $4,000. Then your contractor files a countersuit. He hires a lawyer, whose basic fee is $4,000, and he actually wins. So you are ordered to pay $4,000 in damages to your contractor, and you are also ordered to pay your contractor’s legal fees for the countersuit .
So, your $10,000 windfall has just turned into a $6,000 loss, and your reputation is damaged and you lost two years of your life in the process. You might decide it was worth it (and in some cases, it might be) but often, a lawsuit leaves both parties with an unsatisfactory resolution.
After going through the process, many, many people have decided it was better to negotiate an agreement, even after being in court or during depositions. Agreements and settlements can be more satisfying and they save everyone a lot of money, time, and effort.
While the law makes it sound like you have no choice but to sue, the above paragraph demonstrates the real picture. The law can be a mess, tangled up and full of twists and turns, and you may very well find that one person’s "won" is another person’s "loss." Even though a lawsuit does seem like the best and most satisfying resolution at the beginning, you will very quickly find that the anger or frustration that caused you to consider a lawsuit in the first place is repeated and often worse once it begins.
So ask yourself: is it really worth it?
