What are my rights as a business owner losing money while waiting for a contractor to finish my buildout?
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What are my rights as a business owner losing money while waiting for a contractor to finish my buildout?
A 6 week project has taken 8 months and we
are no where ready to open? My Contractor
has no money to complete the project and my
landlord will not give the promised completion
amount until the job is completed.
Asked on April 30, 2016 under Business Law, Texas
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 8 years ago | Contributor
If the delay is due to someone's fault or negligence, or a breach of their contractual obligations--e.g. the contractor has been too slow to do the work, hasn't hired enough staff, is incompetent, ran out of funding, lied about or overpromised what he could do, etc.; or your landlord improperly denied the contractor access to do work--then you could potentially sue the at-fault party to recover any amounts you are owed or any losses you can prove (which can be tough, with lost income, if you are a new business) you incurred.
But:
1) Party A's fault would not absolve you of your responsiblility to party B; so if the contractor is at fault, that doesn't affect your obligations to the landlord under your lease or any other agreements--you can be held to your obligations even if you can't meet them due to forces or acts beyond your control.
2) If no one is at fault--e.g. the problem was bad weather, or unexpected problems to be addressed, or changes you made to the design/job scope that extended the project--then you cannot recover compensation from anyone else; you can only look to negligent parties or parties who breach their contractual obligations for compensation.
You should speak with an attorney in detail about the situation, to see what your options are.
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