Can I Sue a Contractor for Delaying My Business Development Project?

Your business expansion was supposed to be complete months ago. Instead, you’re watching your grand opening date slip further away while your contractor offers another round of excuses.

When construction delays threaten your business timeline, you face a critical question: Can you sue a contractor for delays? In Ohio, business owners have several legal avenues to recover losses from contractor delays.

What Construction Delays Mean for Your Business Project

Construction project delays rarely happen overnight. They typically result from a cascade of contractor decisions and oversights that compound over time.

Poor project management ranks as the leading cause of construction delays. Are contractors failing to coordinate subcontractors effectively? Then, schedule conflicts are likely to arise.

Common causes of construction delays:

• Poor project management and inadequate scheduling;
• Workforce shortages without proper planning;
• Quality issues requiring costly rework;
• Material procurement failures despite advance notice; or,
• Subcontractor coordination problems, causing workflow disruptions

Quality issues requiring rework create some of the most expensive delays. With unmet specifications, the contractor must tear out and rebuild sections.

The completion date specified in your construction contract creates legal obligations. Hence, contractors fail to meet these deadlines without a valid excuse, and they become liable for resulting business losses.

Legal Grounds for Ohio Construction Delay Claims

Ohio construction law recognizes several grounds for delay claims against contractors. The strength of your case depends on the specific circumstances and contract terms governing your project.

Breach of contract forms the foundation of most construction delay claims. By failing to complete work by the agreed-upon completion date, contractors have violated the fundamental terms of your agreement.

Types of Construction Delays Under Ohio Law

Under most Ohio construction disputes, whether a delay is “excusable” or “inexcusable” is determined by the language of your contract (not a statute), and proof of causation of damages.

• Excusable delays include events beyond the contractor’s control, such as extreme weather.
• Inexcusable delays result from contractor negligence or poor planning.
• Contractor-caused delays from failure to perform contractual obligations.
• Supply chain disruptions that are affecting the entire construction industry may also be an excusable or inexcusable delay, depending on your specific circumstances.

Supply chain disruptions may be excusable only if your contract and the facts support that outcome.

Likewise, Ohio Revised Code Chapter 1311 governs mechanics’ lien rights and procedures (security for payment), rather than “construction contracts” generally.

Key elements for a strong delay claim:

Each one requires specific evidence and documentation to support your claim in court.

1. Valid construction contract with specific completion dates;
2. Contractor’s failure to meet contractual deadlines;
3. Causation linking the breach to your losses;
4. Lack of a valid excuse for the delays;
5. Documented financial losses resulting from delays; and,
6. Proper notice given to the contractor if required by your contract or applicable law

Bringing these elements together builds the backbone of a strong delay claim. You need to show the court exactly how the contractor’s delays impacted your project and bottom line.

Damages You Can Recover In Construction Delays

Business owners facing construction delays can recover various types of financial losses under Ohio law. The extent of recovery depends on the contract terms and the nature of documented losses.

Lost business income represents the most significant category of recoverable damages. This includes revenue you would have generated if the project had been completed on schedule.

Here are the categories of damages you can recover in construction delays:

• Direct costs from the extended project duration
• Lost profits from delayed business operations
• Increased financing costs due to extended construction loans
• Additional rental expenses for temporary facilities
• Consequential damages from missed business opportunities
• Storage fees for inventory and equipment waiting for completion

Liquidated damages provisions in construction contracts can streamline recovery. These clauses establish predetermined daily penalties for delays.

In Ohio, courts assess the reasonableness of liquidated damages based on what the parties knew at the time of contracting, not in hindsight. It is important to note that liquidated damages are not, and cannot be, penalties. Instead, they are predetermined damages set in contract by all Parties.

Consequential damages for business losses require careful documentation. You must show that the contractor reasonably could have foreseen these losses at contract signing.

Steps to Take Before Filing Legal Action Against a Contractor

Smart business owners build strong delay claims through proper documentation and strategic communication. Taking the right steps early can significantly strengthen your position if litigation becomes necessary.

Document every aspect of the delay as it unfolds. Photograph work progression regularly, noting dates and conditions.

Essential Documentation Steps

Before pursuing litigation, follow these essential steps to protect your interests:

1. Send a formal written notice of the delay and request a specific completion schedule, through an attorney;
2. Attempt dispute resolution through direct negotiation with the contractor, through an attorney;
3. Consider alternative dispute resolution methods like mediation, through an attorney;
4. Gather comprehensive evidence of your financial losses during delays;
5. Document all communications with the contractor regarding the timeline and expectations; and,
6. Review contract terms for extension of time provisions and penalty clauses

Email communications provide particularly strong evidence because they create timestamped records and metadata.

Finally, alternative dispute resolution methods like mediation can be faster and less expensive than court proceedings. Many construction contracts include mandatory mediation clauses that must be followed before filing lawsuits. Be sure to read the contract before filing a lawsuit, as it may be summarily dismissed for not having jurisdiction over your claim.

When Small Claims Court vs. Business Litigation Makes Sense

Ohio business owners have multiple venues for pursuing construction delay claims. Each option has distinct advantages and limitations.

Choosing the right forum can significantly impact both the cost and outcome of your case. Small claims court handles disputes involving smaller dollar amounts, making it suitable only for minor delay claims.

Consider these factors as you decide between small claims court and traditional litigation:

• Total damage amount and complexity of loss calculations;
• Contract complexity and interpretation requirements;
• Available evidence and discovery needs;
• Contractor’s assets and ability to pay judgment;
• Timeline requirements for resolution

Most construction delay claims involving business development projects require traditional litigation in the common pleas court. Business income losses and extended operational costs typically exceed smaller court limits.

Building a Strong Foundation for Recovery

Construction delays don’t have to destroy your business expansion plans or drain your financial resources. Ohio law provides substantial protection for business owners as contractors fail to meet their obligations.

In business development projects and their significant delays, time becomes your most valuable asset. Early consultation with construction law attorneys can help you evaluate your options and develop a strategy for protecting your interests.

Contact Cavell Law for a consultation. We’re here to evaluate the strength of your potential claim and help you recover damages from contractor delays.