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Time Is Of The Essence In Construction Agreements

On Behalf of | May 1, 2018 | Construction Litigation

Entering into a binding agreement with a contractor for the construction of a home can be exciting but also stressful depending on how much time you have for the completion of the project. Building projects sometimes take more time than projected based on various factors. To avoid a situation where the delays keep the homeowner from moving into the home later than expected, the homeowner can try to include a clause in the contract stressing that time is of the essence.

Construction Plans and red clock

A “time is of the essence” clause in a construction contract is a provision that states that the construction project should be completed at a specified time and establishes the completion of the project by that as a material term. When a contractor breaches the clause by finishing the project at a later time, the contractor may be required to pay a penalty as agreed in the contract.

Delays can often affect the homeowner’s ability to finance the project, or cause the homeowner to incur additional expenses by having to pay rent to live somewhere else if the project is not completed on time. By agreeing to the time is of the essence clause, the contractor acknowledged these potential losses. The penalties that the contractor is usually expected to pay for breaching the contract include losses for things like rent and labor costs to finish the project, as well as a set amount of money agreed to in the contract.

The homeowner can excuse contractor delays in some situations, and this can alter the time requirements in the contract. If the homeowner wants to allow for excused delays not to affect the time is of the essence contract, the homeowner has to include language to that effect in the contract. Additionally, if the deadline passes and the contractor has not completed the project as agreed, the homeowner should set new deadlines if he wants the contractor to finish the project.

Going on with the project after the contractor breaches the completion deadline without taking any action to set a new deadline can mean the homeowner negatively affects his right to sue the contractor for damages related to the breach. The homeowner has no obligation to continue with the contract once with contractor breaches by not finishing the project on time. However, if the homeowner believes it is easier to complete the project with the same contractor, the homeowner may choose to renegotiate the terms of the contract.

Contact an Experienced Construction Litigation Attorney

It is important for a homeowner who is worried about a construction project being completed on time should consider including a clause in the contract that specifies the need to finish on time. It is equally important to ensure that the clause provides clear guidance on the deadlines for completion, and sets reasonable and realistic penalties that can be enforced if the contractor breaches the contract. To learn more about how you can set proper deadlines in your construction contract, contact an experienced attorney with experience in handling construction disputes. Contact Vocelle & Berg, LLP, in Vero Beach, Florida for a free consultation.

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