It’s Business, And It’s Personal

Negotiations may settle business litigation by subcontractors

| Apr 29, 2014 | Business Contracts & Disputes |

Disputes between contractors and subcontractors often arise. In North Carolina and elsewhere, business litigation over such disputes is not uncommon. A subcontractor often agrees to complete a certain part of the general contractor’s project. It may be the electrical, plumbing, roofing or any number of other specialty jobs.

In some cases, a subcontractor can be hired by another subcontractor to complete some aspect of that subcontractor’s assignment. In one case, a subcontractor that specializes in structural steel, entered into a subcontract with another subcontractor in the amount of $522,000 supply and install designated steel in a school building remodeling project. The structural steel subcontractor has sued his subcontractor and the general contractor on the job.

The lawsuit claims that the original price was adjusted upward to $624,455.42. The plaintiff subcontractor alleges having received payments that leave a balance due of $145,320. Because the general contractor and the subcontractor defendants have allegedly both been paid in full for their work, the plaintiff claims that each is indebted to the plaintiff for the balance due, along with penalties, interest, court costs and attorney’s fees.

The dispute is essentially between the structural steel company and the subcontractor that it contracted with. The reasons for lack of full payment in such situations runs the gamut of possibilities in business relations. The indebted subcontractor may be in a dispute with the general contractor over some aspect of the job. Despite the plaintiff’s allegations, the defendant subcontractor may still be waiting for payment from the general contractor.

If the costs of the job got out of control for the defendant subcontractor, it may be unable to come up with the funds needed to end its commitment to the plaintiff subcontractor. In that event, the plaintiff may be in for a long wait, or in some instances, may be pressured to settle for a reduced amount to put the business litigation matter to rest. In North Carolina and elsewhere, the finding of a resolution acceptable to both litigants is a skilled undertaking by experienced business litigators.

Source: The Louisiana Record, “S&L Steel Erectors sues claiming breach of contract“, Lizzy Fitzsousa, April 24, 2014

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