Construction projects are complex, high-stakes endeavors that require meticulous planning and execution. But even with the best-laid plans, things can go wrong – and when they do, the contract is often the first place project managers turn for guidance.
However, what if the agreement you’re relying on is unenforceable? This problem can lead to delayed projects, lost revenue and lawsuits. To help you sidestep this issue, we will underscore the factors that can render a construction contract unenforceable.
Invalid construction contracts: What you need to know
There are several factors that can invalidate construction contracts. Understanding these components is crucial for project managers to avoid costly disputes and ensure the success of their projects. The reasons why a construction contract may be unenforceable include:
- Legality: The contract is likely invalid and unenforceable if a contractor takes on a project without the proper permits and licenses. This issue can be critical in Florida, which has strict licensing laws.
- Breach of contract: If there is a contract breach, a party can use that breach as a defense against enforcement. For instance, suppose a general contractor fails to pay a subcontractor according to the terms of the contract. In that case, the subcontractor can use that nonpayment as a defense against any unmet obligations under that same contract.
- Misrepresentation: Misrepresentations or false claims may also invalidate the agreement, and can also be used as a basis for a fraud count. For example, if a contractor makes a false claim about their qualifications, the contract is based on a misrepresentation and thus invalidated, or worse, be a basis for a claim of fraud in the inducement.
As a contractor, it is crucial for you to understand these potential pitfalls and take steps to protect the project from costly disputes. By being aware of these issues, you increase the chances of a successful project.
Avoiding unenforceable construction contracts
As complex construction projects grow in scope, the importance of a well-crafted contract cannot be overstated. Project leaders must take a proactive approach to mitigating risk and ensuring project success.
This Blog does not constitute legal advice and is not a substitute for competent legal advice from an attorney licensed to practice in your state. The Blog is for educational purposes only and does not create an attorney-client relationship with Magaziner Law, P.A. or any of its attorneys. Any links from another site to the Blog are beyond the control of Magaziner Law, P.A. and do not convey its approval, support, or any relationship to that site or related organization.