Friday, August 18, 2006

What are a Homeowner's Possible Damages against a Home Contractor?

What are the damages that can be recovered by a homeowner when a home contractor fails to complete the job, or does the work improperly? The damages depend on the claims that are brought against the contractor.

Typical damages include:

Breach of contract - The homeowner has a duty to mitigate (reduce) his damages in a reasonable fashion, but may sue for the amount of money that it takes to complete the work, minus any money that was held back from the contract.

The homeowner may also collect for moneys paid to do corrective work beyond the contract price.

Under some state statutes, the homeowner may collect up to double or triple damages, attorney's fees and costs (filing fees, etc.). The doubling or tripling of damages is usually awarded when there have been unfair and/or deceptive practices, or extreme negligence by the contractor.

These damages are "punitive" in nature, in that the double or triple damages are the punishment.

Consequential damages, lost time from work for example, are not available unless the contract provides for them.

Delay damages are also not available unless provided for in the contract.

When drafting the contract, both sides should think about possible damages, and whether they want to allow for them if a conflict occurs.