Legal Question in Construction Law in California

Re: Delay with Construction

Neither assertion is true. The contract between you and the contractor will control.

Re: Delay with Construction

The only laws I find covering change orders are Business & Professions Code sections 7159 and 7159.6. The essence of the provisions seems to be that change orders need to be in writing and must contain certain items such as the scope of the change and its effect on progress payments and other such things.

The provisions protect both the owner or "buyer" and the contractor, and you should obtain a copy and study it if you are in the home improvements contracting business, but there is nothing in either law (or any other that I know of with respect to private contracts) that automatically gives the contractor a specific amount of additional time (such as 120 days) when there is a change order from the buyer/owner.

Also, I find no statute granting extra time due to rain delay. Major construction contracts are usually either bid with the bidders taking the likelihood of rain into consideration in preparing their bids, or contain specific provisions for relief on completion dates due to days of rain or amount of rainfall. The contracting parties are assumed to be able to take care of such contingencies without "help" from a law giving an automatic extension. A court would more often than not hold that a contractor took the possibility of rain delays into consideration in preparing his bid and agreeing to a completion date, and would assign the risk of excess rain delay to the contractor.

Re: Delay with Construction

The original contract will control as far as the time for completion is concerned. Typically the contract (because it is probably drafted by you) contains a clause whereby the time for completion will be extended for items which are beyond the contractors control such as inspections, rain, acts of god, material supplier delays, etc , etc. If your contract did not contain such a clause then Mr. Whipple is correct and you will probably be charged with that knowledge because you are the contractor and know the industry. Therefore the rain delay or other delays would be your responsibility.

Now as far as the 2nd contract for a "financial penalty" because of the delay. This again would depend on the contract language. This may be treated as an accord and satisfaction (settlement) of the delay claims or it may be disregarded by the court as a "penalty". The contract you speak of is a "liquidated damages" (LD) clause whereby you agreed to pay a certain sum for each day the project went over. Typically LD clauses are upheld by courts unless they are sever and harsh. For a LD clause to be upheld it must not be a "penalty" or punitive. The damages are punitive even if the conduct is willful and malicious or the terms are oppressive and unconscionable. Courts will allow LD's when 1) the damages are a reasonable forecast at the time of contracting and 2) the damages (for delay) would have been difficult to estimate.

As such I suggest that you probably honor and finish the contract and job and pay the "penalty" LD's unless they are extreme or harsh. However, if you stop paying the LD's be prepared that the other party may remove you and get the job finished by someone else if you are way past your time. You may be found to have breached the contract and be liable for the "delay damages" which could far exceed the LD's you agree to now. You may wish to consult an attorney about your particular situation and you should consult an attorney about writing a better contract for your business so that you are better protected in the future. A little bit of money spent today may save you tens of thousands in the future. Please check my profile and contact me should you need further assistance. I was a contractor for 15years before I became an attorney so I am readily familiar with the business and legal aspects of contracting.