Common Legal Claims Filed Against Commercial Building Contractors in North Carolina

As a builder, you enter into agreements with customers to undertake construction projects on their property. However, despite your best efforts, changes in expectations, communication breakdowns, and unforeseen disputes can arise, potentially leading to legal challenges against you.

Certain recurring themes are central to lawsuits in the construction industry, particularly in North Carolina. Here, we’ll spotlight some prevalent legal claims often filed against commercial building contractors.

Prevalent Legal Claims Against Commercial Contractors 

With years of experience representing commercial contractors in disputes, Anderson Jones, PLLC has developed a comprehensive understanding of the common reasons why commercial contractors face lawsuits. Chief among these reasons are:

Contract Breaches

One of the leading reasons commercial contractors get sued is because their client alleges that they breached the contract. North Carolina construction companies often face such legal claims stemming from failures to:

  • Stick to the approved building plans
  • Complete a building project in a timely fashion
  • Adhere to the agreed-to budget

Construction contract terms that appear clear-cut can, in reality, be ambiguous. When a client claims a breach of contract, engaging a lawyer to decipher the contract’s actual language and determine if a breach has truly occurred is crucial. Additionally, assessing whether a “material” breach has taken place often demands an in-depth comprehension of contract law.

Negligence Claims and the Economic Loss Rule

Instead of pursuing a breach of contract claim, or as an alternative to it, clients might opt to file a negligence lawsuit, which typically involves alleging that the contractor failed to meet the standard of care expected in the industry, resulting in damages or losses for the client. 

However, it’s important to note that in some jurisdictions, such as North Carolina, the economic loss rule may prevent clients from bringing negligence claims against contractors for purely economic losses. This rule generally limits recovery to contractual remedies when the alleged damages are only economic in nature and do not involve personal injury or damage to other property.

For example, suppose a property owner hires a general contractor to construct a commercial building. If defects or issues arise during construction or after completion, leading to financial losses for the owner, the economic loss rule typically limits the owner’s ability to sue the general contractor for negligence. Instead, the owner is generally limited to seeking remedies outlined within the contractual agreement, such as warranty provisions or specific dispute resolution mechanisms.

This limitation is based on the premise that parties should resolve economic disputes through contractual means, rather than through negligence claims that may open the door to broader liability and potentially disrupt the balance of responsibilities outlined in the contract.

Overall, understanding the nuances of the economic loss rule is crucial for property owners, contractors, and legal professionals involved in the commercial construction industry in North Carolina.

Deceptive Trade Practices Claims

Deceptive trade practices claims against contractors can be another avenue pursued by property owners or clients in the construction industry. In North Carolina, these claims are often based on allegations that the contractor engaged in unfair or deceptive acts or practices during the course of the construction project.

Property owners or clients may pursue deceptive trade practices claims to seek remedies such as damages, injunctions, or contract rescission. These claims can provide an alternative legal recourse when the economic loss rule limits recovery under negligence claims.

However, it’s important to note that deceptive trade practices claims require a demonstration of specific elements, such as proving that the contractor’s actions were deceptive or unfair and that these actions caused harm or financial losses to the client. Additionally, the North Carolina General Statutes, particularly Chapter 75, outline provisions related to unfair and deceptive trade practices, providing a legal framework for addressing such claims within the state.

What To Know About Your Construction Contract

When a skilled attorney drafts your contract, it’s probable that it includes exculpatory clauses designed to safeguard your interests. However, there are instances where, should your case go to court, a judge may find these clauses inapplicable. Several factors may influence this decision:

  • The clarity and unambiguous nature of the limits on liability in the contract.
  • The relative bargaining power of each party, especially whether you and the other party were negotiating from equal positions.
  • Whether both parties entered into the contractual agreement in good faith.
  • The presence of clauses within the contract intended to discourage negligence.

These considerations play a crucial role in determining the effectiveness of exculpatory clauses in contractual agreements, particularly when legal disputes arise and are brought before a court.

How Our Legal Team Can Help You If a Customer Takes Legal Action Against You as a Builder

Here at Anderson Jones, PLLC, we have a lengthy track record of representing builders across North Carolina who are facing legal action from customers who hired them to perform construction work. Our goal is to work out a cost-effective resolution that interrupts your business as little as possible. Reach out to us if you, too, are seeking to quickly and amicably resolve any lingering construction disputes that are currently taking time away from you from focusing on income-generating activities.