Business owners who have commissioned the construction of a new building for their operations in Illinois or Missouri can run into difficulties when the project isn’t finished on time. If you have experienced a significant delay, you may wonder whether you can sue the construction company for operational damages. The answer is maybe.
The construction contract may limit your options
Many contracts will stipulate what can and cannot occur if the building contractor runs into delays. Having such language in your contract makes your options clearer. Liquidated damages are a common way for contractors to acknowledge the possibility of delays and are commonly written into contracts. Instead of paying for the actual costs, the contractor will pay an estimated amount for each day of the delay. However, agreeing to an equitable amount can be tricky because if the amount is too low, you won’t receive proper compensation. If its too high, the amount may be unenforceable with courts generally siding with contractors.
What if the contract doesn’t stipulate construction delay provisions?
This situation makes things even trickier. Common law, not construction law, generally applies here. Typical damages that customers may try to recover include hold-over or short-term rent, storage charges, cancellation charges and non-refundable expenses associated with moving and other additional expenses related to the construction. Sometimes, these issues can become litigious, especially if the delay drags on for a long time.
How to avoid construction delay expense problems
Issues don’t stop at out-of-pocket expenses. Unless specifically mentioned in a contract, building and business owners can seek consequential damages too, which include lost profits, but only if owners can legally prove that the delay was preventable.
The best way to avoid problems and get the compensation you deserve from construction delays is to write reasonable compensation stipulations into your construction contract. Working with an attorney knowledgeable about construction law and engineering may give you insight into the process. Even if you have a contract without the proper wording, you may still be able to recover some damages with legal help.