Business & Construction Law
Business Law Questions
Should I incorporate?
This is a question that cannot be answered easily. One primary reason why people create a corporation is to protect them from unlimited liability. It is best to consult with a lawyer about planning an entity such as a corporation and whether it is best for you. Furthermore, in order to sustain the protections of the entity, you must maintain all corporate formalities and procedures. Merely incorporating will not ensure the protection from liability.
A friend and I have created a partnership. This partnership protects us from liability, doesn't it?
The simple answer to that is no. The partnership is merely collaboration between two or more people in a business where the liabilities and the profits are shared. A partnership does not protect the partners from liability. In fact, you can be liable for the acts of your partner. Furthermore, it is best to have a written partnership agreement so that there is no dispute or misunderstanding between the partners down the line. It would be best to consult with a lawyer in the creation of a partnership.
A corporation and an LLC are the same, right?
No. An LLC is a relatively new entity. The letters stand for limited liability company. It is in some ways the same as a corporation but in other ways, it is more like a partnership. For smaller businesses, this may be a good choice. Again, it is best to consult with an attorney about the creation of a business entity and which entity is best for you.
I am about to purchase a business. A business broker is assisting me. Do I need any other help?
Probably so. Depending on the complexity of the transaction, it is probably a good idea to consult with at least a lawyer and possibly an accountant as well. Before you purchase a business you should do a thorough investigation of that business. Assurances from the seller or broker cannot be accepted with investigation as to their accuracy and reliability as predictors for your operation of the business. It is also very important in the purchase or sale of a business to have a clear written understanding between the parties as to all aspects of the transaction.
Contract Law
Duffy & Feemster assists businesses and individuals with all types of contracts. It is best to consult with a lawyer during the formation of the contract to avoid possible problems and disputes down the road.
Duffy & Feemster will also consult with a person or business about the interpretation of a contract as well as options when a dispute arises. We also litigate contract disputes should they arise and be unable to be addressed through negotiations. Charges will apply for any of these services.
Construction Law
How can I make my residential construction project a success?
While there is no way to eliminate all problems in a project, there are certain things you should keep in mind. Most disputes arise from misunderstandings about the details of the work. Some things that you should have are:
(a) Competent house plans which show the work to be performed in sufficient detail.
(b) Specifications or a list showing the actual materials to be used in the house. If a particular brand and SEER rating HVAC unit is to be used, it should be on the list. A certain brand of faucets, roofing, a certain type of wood for flooring, etc. – If it is supposed to be in the house, it should be on the list.
(c) A written agreement which identifies the work which will be done and the price for that work as well as the other pertinent rights and obligations of the parties.
Owners, remember that is very important to consider very carefully the contractor that you are using on the job before you hire them. The most inexpensive option is not always the best. Consider whether the contractor has a good reputation in the industry, is insured, and has performed projects of this size and scope and complexity before. For certain aspects of construction work, the builder has to be licensed.
Contractors, remember that the duty to make the agreement between the parties clear goes both ways. Make sure your contract protects you. Making sure the parties are on the same page before you start work can save you a lot of trouble. Also remember that a little communication or patience can go a long way to avoiding bigger problems.
For a job of any size, you may save considerable amounts of money by consulting with a lawyer in the contract phase of the construction project. However, a lawyer cannot represent both sides of the transaction. Ideally, each party would get their own attorney.
I am a homeowner. My contractor has asked for 50% down before she even starts. Is this normal?
While some down payment is not an automatic danger sign, it is not customary for a contractor to be paid a substantial portion of the contract price before she even starts. This could be a warning sign or could lead to problems. If the contractor says that the payment is for materials, you could offer to write a joint check to the contractor and the supplier. Or you could consider a contractor that does not require such a large upfront payment.
I am having work done on my house. Do I need to do anything with the city or county?
You may need to acquire a building permit from the City or County Inspections Department. New construction always needs a permit. Renovations may require a permit as well. This may be done by your contractor, but you should always check to see whether you need a permit and then make sure the permit was acquired. The permit is just the first step. The Inspections department of the city or the County (depending on the location of your house) will then inspect various parts of the work. The owner or the contractor also needs to call the inspections department for various inspections. Inspections performed include foundation, footings, framing, insulation, electrical rough-in and final, plumbing rough-in and final, mechanical rough-in and final, and then overall final inspection.
I am a builder and am not being paid. The owner keeps telling me he will pay but I feel like he is stringing me along. What can I do?
In such a situation, it is probably best to consult with a lawyer. Under some circumstances, a contractor may file a lien against the property when they have not been paid. It is advisable to consult with a lawyer about the process of filing a lien as there are many legal barriers that must be successfully crossed. There is also a strict deadline for filing liens.
I am an owner and the builder will not finish my house. I think that there may be problems with the construction. What should I do?
In such a situation, it is probably best to consult with a lawyer as there is not a simple answer.
I am buying a house from the builder. We are about to close but the house is not finished. The builder assures me that he will complete items after closing but I am worried.
At the least, any assurances should be in a written document that will survive closing. You may want to consult with a lawyer before closing to make sure that your interests are protected.
I am a commercial contractor and the general or the owner has told me to go ahead with work that is not part of the contract and assured me that I would be paid. Is this ok?
This could be a problem. Such work generally requires what is called a "change order". Many contracts require that a change order be in writing. Without the written assurance from the owner and the general contractor that you will be paid for this additional work, there is no guarantee that you will ever get your money. It is best to get a written assurance before you begin such work.
I am a small subcontractor and am beginning a large commercial job. The contract given to me by the general contractor is long and complex and seems to be skewed in favor of the general contractor and owner. The general contractor has told me not to worry about this, that he will take care of me. This job could be really big for my company but I am concerned.
It is best to fully understand the contract you are signing. If a dispute arises, you can be assured that the general contractor will have to look out for its own best interests rather than yours. It is best to consult with a lawyer to explain any components of the contract that you do not understand and make sure that you will be able to undertake this job.