Construction Law Guide

While working in construction, it is imperative that all parties understand the areas of construction law. After all, the processes and procedures involved when in construction are complex. In order to protect construction companies (as well as their clients), construction-specific laws have been developed.

These rules and regulations provide guidance before, during, and after a job is complete. That way, if a business arrangement does not go according to plan, there are methods available in regards to dispute resolution.

What Is Construction Law?

A branch of law, construction law covers any legal issues related to the construction of a building or structure. Being its own unique aspect of law, construction law has developed into its own area legal practice.

Overall, construction law entails all components and phases of a project, including everything from construction to engineering, project site safety to insurance, bonds to liens, and much more. Covering such a wide array of variables, construction law is both complex and distinct.

Issues may arise on a federal, state, or local level based on the regulations imposed. For example, workplace safety laws and employment regulations tend to fall under federal statutes — whereas issues surrounding noise and zoning tend to be imposed by local cities and counties.

Since there are varying tiers in relation to levels of government, legal issues can arise at various stages of construction. When dealing with construction law, there are two main categories that you need to be aware of. These include:

  • Non-contentious circumstances — This involves the steps taken before any work begins. Since there are often a number of people and organizations involved (i.e. developers, architects, contractors, etc.), the contract needs to be created and legally verified.
  • Contentious circumstances — This involves issues that arise during the contract itself. Once construction occurs, each party involved needs to remain committed to whatever they initially agreed to. For example, if a project is running late or someone involved has breached the contract, disputes would need to be resolved.

What Areas of Construction Law Exist?

The construction industry is vast in terms of those involved, as well as their responsibilities. When you first speak with a construction lawyer, be sure that they are well-versed in all aspects of construction law. After all, there are various areas that encompass different possible conflicts and in turn, resolutions.

Before moving forward, please be aware of the following areas:

Construction contract law

As stated above, this step occurs before any work begins. A construction lawyer will typically get involved when drafting and negotiating the terms of construction contracts. Whether a project is small or large, contracts are imperative to ensure that everything runs smoothly and that each party is held responsible for what they agreed to.

RelatedWhy Contractors Should Have Their Contracts Reviewed by Lawyers

Each contract will be specifically created for the job in question. Such contracts can come in many forms, including the development of construction contracts (with or without supplementary conditions), design contracts, supply chain contracts, engineering contracts, licensing agreements, etc.

If anything were to go wrong, these contracts include the types of language and information that ensures a fair resolution. That is why these initial contracts need to be drafted in a way that is proactive, focusing on specific state laws that will help better protect you and your company.

Planning and project development

Construction projects often develop and evolve across time. That is why construction lawyers often get involved in matters related to the planning and implementation of the developmental process. In other cases, government approval is required to continue working.

From building plans to zoning regulations, many construction lawyers will often stand before municipal councils to ensure that projects are able to legally proceed. In order to effectively approach government officials, the right documentation and tact are required.

Employment law and worker’s compensation

Although each and every construction company is owned by one or more individuals, each employee is imperative to the success of the company itself. This is particularly true for large projects that require significant manpower. However, outside of the physical construction of a building, companies must also be mindful of the hiring and firing processes, as well as management procedures.

There are state and federal laws in place that require companies to hire and fire workers legally. There are also laws developed that include all aspects of employee compensation, the act of withholding taxes, and other critical considerations. To ensure compliance, it is important that companies discuss their obligations with an experienced firm.

In addition, worker’s compensation insurance is typically required and should be addressed accordingly. That way, if an accident or injury does occur, the company involved can easily comply with obligations once a claim is made. If you currently have any questions about how to purchase insurance or how to effectively notify your employees, it is important to speak with a legal representative.

Claims and dispute resolution

When it comes to possible claims and disputes, each situation is handled on a case-to-case basis. However, in construction, it is important that you’re aware of resolution tools and proactive management so that you can achieve a more successful outcome.

Although contracts and areas of planning are often developed and managed, issues do arise. In many cases, reaching a resolution can be as simple as approaching the other party to effectively dispute a claim. This is particularly true when dealing with payment disputes.

In relation to contracts and payment processes, if you are unfamiliar with the role of a mechanic’s lien, please refer to this article: Mechanic’s Lien Form: A Comprehensive Guide. In comparison to negotiation, mediation, and arbitration, once litigation is involved, the process of managing such disputes becomes more formal.

From occupational safety to property law, torts to litigation, a construction lawyer handles all aspects of construction law. Although these lawyers will aim to resolve disputes as quickly and efficiently as possible, they are comfortable with conflict.

Some of the other majors a construction lawyer may handle include, but are not limited to:

  • Bankruptcy
  • Building codes
  • Building permits
  • Delays
  • Employment immigration
  • Environment matters
  • False claims
  • Fire regulations
  • Labor issues
  • Licensing
  • OSHA (and other federal agencies/associations)
  • Payments
  • Public or private construction
  • Unresolved damages
  • Violations

How to Effectively Negotiate the Construction Bidding Process

Unfortunately, the most commonly made mistakes (which can lead to the most significant implications) occur during the earliest stage of a project. Although bidding is a fairly straight-forward process, the process itself can become rather complicated.
Before bidding on your next project, regardless of its size, please consider the following variables. In doing so, you will ensure the highest level of efficiency and protection.

Joint ventures

When bidding on a large project, some construction companies will form a joint venture with another company. This is often based on greater financial strength. From a legal standpoint, it is important that you do your homework and seek representation. Once you have verified that the company is licensed and truly eligible to work on the project, a joint venture agreement will need to be drafted.
That way, each company understands what they are responsible for. Also, it is important that each party is aware that by bidding on the project, they are already agreeing to certain terms. That is why many construction lawyers recommend that they review bid documents before any formal bids are made.

Working with public vs. private clients

Who you plan to work for can make a difference in how you handle any bidding disputes. For example, when working with private clients, they are often more flexible in comparison to governmental agencies. That is because in many cases, these agencies are actually prohibited by law to negotiate after the initial bidding process.
Again, private clients are also more flexible in terms of how they conduct the bidding process. In many cases, a contractor’s qualifications are preferred over price. However, when bidding to a public entity, they are often legally bound to accept the lowest possible bid.

The most common mistakes

In construction, you need to be proactive in terms of the contracts you enter. Unfortunately, one of the most common mistakes made is not fully understanding the scope of work involved. You must practice due diligence and simply understand what you’re essentially “getting into” before any bid is submitted and any contracts are legally signed.
Although they will not often be involved in the bidding process itself, if you will be working with subcontractors, you need to consider the subcontractor bids you use for your final number (and consider their schedule). This is because many contractors will submit a bid before verifying whether or not the subcontractor is available to complete the work itself. Alternatively, if you are a subcontractor and are seeking compensation for the work you completed, this article is for you.

Louisiana Construction Law

Construction law varies from state-to-state, which is why legal representation is so important. In the state of Louisiana, the law is mainly governed by Louisiana’s Civil Code and Revised Statutes. Being a subset of business and contract law, construction law is unique within Louisiana.
This is based on what’s known as the Napoleonic law. Unlike the other 49 states, which are built on English common law, Louisiana laws take a civilian law approach in relation to French traditions. That is why it’s imperative that contractors from other states, such as California, are aware of the Napoleonic Code.
This is something that can be discussed with a construction lawyer. However, for the most part, the key to construction in Louisiana is the drafting and negotiating of contracts. That’s because if issues do arise, more often than not, they can be handled based on the contracts originally signed.

Why Hire a Construction Lawyer?

As stated above, a skilled construction lawyer works hard for their clients. Their core goal is to ensure fast resolution so that their clients can continue doing business. By hiring a construction lawyer, you can achieve greater peace-of-mind. This allows you to focus on what really matters — the job at hand.

If for whatever reason conflict does occur, a construction lawyer will be confident in court. Offering their clients diverse skills, they understand how to problem solve within this complex, evolving industry.

Overall, some of the top benefits associated with hiring a construction lawyer include:

  • Helping clients draft and negotiate legally binding contracts. By working with a lawyer, they will ensure that the contract is not only legally sound but also reasonable in terms of the listed expectations.
  • Ensuring that payments are protected so that contractors are fully compensated for their work based on the initial agreement.
  • Increasing efficiency in relation to permits, environmental regulations, town hearings, government approval, and dispute resolution (at all levels).
At the end of the day, if you work within the construction industry, you need to understand your legal rights and obligations. Since there are so many risks, restrictions, and possible hazards, legal representation could help you steer through any unexpected issues.
If you have not yet consulted with and hired a construction lawyer, it’s important that you seek legal counsel. This is particularly true if you are:
  • Beginning a new construction project and want to ensure that all local and federal regulation are being followed as expected
  • Drafting any form of legal contract or document
  • In need of a permit or require permission from government agencies
  • Concerned about environmental regulations
  • Involved in any form of conflict (whether it be with an employee, employer, supplier, client, etc.)
  • Filing a claim or have had a claim filed against you
The ultimate goal is to prevent any legal issues by following all required procedures and understanding your responsibilities. Whether you seek advice regarding a recent contract you signed or have not been paid for your work, our team specializes in this unique area of law.
Regardless of the construction law challenge or hurdle you currently face, we can assist you and your team. We represent contractors, property owners, suppliers, and all other professionals working in construction. If you currently operate in New Orleans or plan to conduct work within the state of Louisiana, please contact us today.
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