June 2023 - Alves Radcliffe

Why Is Contract Law Important for Construction?

When it comes to the construction industry, relying on verbal contracts can get you into a lot of trouble. Unfortunately, people do not always live up to their word, and even if they do, circumstances can change and render an old agreement moot. If the agreement isn’t recorded and notarized on paper, you could face some serious issues.

This post will explain the importance of contract law for construction, so you can ensure that all of your projects run smoothly and everyone’s roles are clearly spelled out.

The Downside of Verbal Contracts

Verbal contracts leave a lot to the imagination. That’s because it is impossible to discuss every facet of a project in a single conversation in a manner that all parties will clearly remember. By writing these details down and having all parties sign the agreement, you can ensure that the agreement is indexed as agreed upon.

Written contracts can provide all of the following benefits:

Initiating terms for all payments due
Negotiating payment terms for material price fluctuations
Setting a timeframe for project completion
Assigning responsibility for project delays
Providing clear guidance for dispute resolution
Defining the scope of the project and setting clear expectations
Implementing a viable, legal termination clause

Simply put, contracts remove much of the uncertainty surrounding verbal contracts.

A Written Contract Holds All Parties Accountable

Construction projects typically involve multiple parties. Even with just two parties, things have the potential to be misconstrued. A contract provides a solution for many of the situations that could arise from multiple parties working together on a single construction project.

Why Are Contracts Effective?

Contracts are effective because they assign responsibilities across the lifespan of the project. For example, if one of the parties named in the contract fails some of their obligations, the contract will contain provisions regarding how they will be held accountable. From there, it is up to a construction attorney to enforce the provisions.

Beyond dispute resolution, contracts are designed to protect all parties involved. By outlining the terms of an agreement, a well-written contract can minimize employee exploitation and provide a fair allotment of time and resource distribution. It can also provide peace of mind by protecting specific components of your operation.

What Happens When a Contract Is Breached?

If you have a written contract that is breached by one or more parties listed in the contract, you could be entitled to financial compensation. Conversely, the contract could have provisions that enable parties to pull out under specific conditions.

Default Provisions

If a construction contract is not in writing, the law can use a default provision in the event of an issue. This means the judge will decide the case by imposing a default term. Unfortunately, this may not be favorable to the party seeking compensation.

By having a construction contract in writing, you can sidestep default provisions and resolve disputes more amicably. If your contract can be modified, you and the opposing parties can agree to change the provisions of certain clauses in a manner more suitable to the current situation. If you need help, contact a qualified construction attorney.

Need an Attorney? Contact Alves Radcliffe Today

If you are looking for a construction attorney with plenty of experience litigating construction cases in the Bay Area or the Greater Sacramento area, contact Alves Radcliffe. Alves Radcliffe is a California construction attorney with over 25 years of experience representing a wide variety of clients in construction law disputes that range from simple to complex. Reach out today to schedule your initial consultation.

How Can Someone Breach Fiduciary Responsibility, and What Are the Remedies?

Fiduciary duty, which is also referred to as fiduciary responsibility, refers to the legal relationships between a fiduciary and a beneficiary. The fiduciary acts on behalf of the beneficiary or principal concerning a wide variety of possible legal matters. The appointed fiduciary assumes legal responsibility for acting in good faith and with loyalty to the beneficiary. When a fiduciary fails to act in good faith while remaining loyal to the beneficiary, the fiduciary has violated the duty of care doctrine.

If you believe a fiduciary appointed to act on your behalf has violated the duty of care legal doctrine, you should contact an attorney who specializes in business and commercial law to review the facts of your case.

How Can Someone Break Fiduciary Responsibility?

Fiduciary responsibilities cover a wide variety of legal issues. The following three breaches of fiduciary duties represent some of the most common types of breaches.

Agent and Principal

An agent is anyone who assumes responsibility to act on another person’s behalf. The agent has a fiduciary duty to protect the interests of the principal by never acting contrary to the principal’s stated interests. One of the most common types of agent and principal relationships concerns the legal relationship between an employee and employer. Breaches of fiduciary duty committed by an employee include sharing employer trade secrets, abusing employer funds or failing to account for using employer funds, and acting on behalf of a competitor to damage the reputation of the employer.

Business Partners

Business partners assume a fiduciary responsibility to act in the best interests of every other partner, as well as the company. One of the most common breaches of fiduciary duty committed by a partner concern mismanaging company funds or failing to account for spending company funds. A partner who exposes other partners and the company to liability by committing one or more acts of negligence has breached the partner’s fiduciary duty. Failing to disclose a conflict of interest, concealing critically important business information from the other partners, and damaging the goodwill of the partnership by conducting illegal acts also represent examples of a partner’s breach of fiduciary responsibility.

Board of Directors

Every corporation is led by a group called the board of directors that makes decisions on behalf of the corporation. Since the corporation’s shareholders elect each member of the board of directors, each board member owes the shareholders a duty of care to make business decisions in the best interest of the shareholders. One common example of a board of directors breaching its fiduciary duties involves preventing shareholders from exercising their legal right to vote on important business matters. Denying shareholders access to business records also violates the duty of care doctrine for fiduciary responsibility. Refusing to pay dividends and committing illegal acts to force out minority shareholders also represent breaches of fiduciary duty.

What Are the Remedies When Someone Breaches Fiduciary Responsibility?

Beneficiaries that sustain losses caused by one or more breaches of fiduciary duty can receive three types of damages to recover from financial losses.

Economic Damages

Economic damages represent the tangible costs associated with one party breaching the fiduciary responsibility to act on behalf of another party. For example, a partner who misuses partnership funds might have to pay back the mismanaged money as part of the economic damages awarded by a judge.

Non-Economic Damages

Non-economic damages do not come with a price tag. Instead, this type of financial award covers the costs associated with mental and emotional anguish issues. Proving a beneficiary suffered from mental and emotional anguish caused by a breach of fiduciary responsibility can be more difficult to do than proving the financial losses caused by economic damages.

Punitive Damages

Judges do not award punitive damages to help plaintiffs pay for economic or non-economic damages. Punitive damages punish a defendant for committing one or more breaches of fiduciary duty. They also deter defendants from committing the same breach or breaches of fiduciary responsibility in the future. For the worst cases of breaching fiduciary duty, a judge can award punitive damages that exceed the combined value of economic and non-economic damages.

Alves Radcliffe, LLP — Business Attorney

If you need assistance with business litigation, call Alves Radcliffe, LLP at 916-333-3375 or send us an email. We have over 25 years of combined experience, and serve clients throughout Greater Sacramento, Northern California, and the San Francisco Bay Area.

What is Litigation?

Litigation, which refers to the process of resolving disputes within the American judicial system, is a word you have heard numerous times throughout your lifetime. It is a general term that refers to any type of legal dispute, including one that covers a case involving business and commercial law. The steps that unfold during the litigation process are different, depending on the type of law and case.

For example, many people assume litigation is the same as filing a lawsuit. However, filing a lawsuit represents just one type of litigation. In fact, most litigation never sees the light inside a courtroom, as cases get resolved without having them reaching the trial phase of the litigation process.

What is the Litigation Process?

Although litigation differs among various types of law and cases, you can learn the answer to the question, “What is litigation?”, by understanding 5 general steps:

Investigation

Every litigation process starts when a client hires a business litigation lawyer to handle a dispute. Whether a vendor violated a contract or a general contractor missed several deadlines, the attorney reviews a client’s case to determine the best way to proceed. If an attorney accepts a client’s offer for representation, an investigation into the case immediately follows that uncovers the facts of the case.

The investigation conducted by a lawyer includes gathering and organizing evidence, as well as interviewing witnesses that provide legal support for the client. After completing an investigation, the attorney decides whether to send a demand letter to the other party.

Demand Letter

A demand letter includes the result of the investigation conducted by the client’s attorney, starting with the time and date of the incident that has led to litigation. The client’s lawyer provides a detailed account of the events that have motivated the client to take legal action, as well as the value of compensation sought by the client. Typically sent by certified mail, a demand letter acts as the starting point for negotiating a settlement, as well as presents enough evidence to persuade the other party that the client would win the case if it went to the trial phase of the litigation process.

Discovery

The discovery phase of the litigation process takes place involving the participation of both parties. With discovery, the court requires both parties to meet and exchange information that is relevant to the case. Both attorneys share physical evidence and the statements provided by the witnesses they have interviewed. The goal of the discovery phase of the litigation process is to determine whether both parties can find enough common ground to warrant the start of negotiations.

Negotiations start with the plaintiff’s lawyer submitting an offer, which the defendant can either accept or reject. Several rounds of counter offers can follow until both parties reach a settlement agreement or decide to move on to the trial phase of the litigation process.

Pre-Trial

Pre-trial represents the phase of the litigation process in which both parties establish the facts surrounding the dispute in question. The judge hearing the case reviews the pre-trial motions to determine whether the facts warrant dismissing the case or if the case should move forward to the trial phase. Another option for the judge hearing a civil court dispute is to recommend both parties participate in an alternative dispute resolution process, such as arbitration or mediation.

Trial

Civil court trials revolve around the presentation of the facts both parties have collected surrounding the legal dispute. Either a judge or jury hears the presentation of the facts presented by both parties and then has to determine which of the presented facts represents the truth. Both parties have the right to call witnesses to testify, including experts in their fields that can clarify the relevance of the presented facts of the case. During a jury civil trial involving both a judge and jury, the judge’s role is to rule on matters of law that impact the decision-making process made by jurors.

Alves Radcliffe, LLP — Litigation Attorney

If you need assistance with business litigation, call Alves Radcliffe, LLP at 916-333-3375 or send us an email. We have over 25 years of combined experience, and serve clients throughout Greater Sacramento, Northern California, and the San Francisco Bay Area.