According to the Louisiana State Licensing Board for Contractors, there are approximately 1100 licensed contractors in New Orleans. The State of Louisiana has a vested interest in contractors’ dealings with the public and therefore regulates the profession fairly extensively. While there is extensive laws, rules and regulations regarding contractors, the following list outlines the most common issues that Louisiana Contractors face on a daily basis:
- No matter the type of project, one thing seems to be fairly common: slow or non-paying owners. The Louisiana Public Works Act expressly provides remedies for contractors who have not been paid for their services. In a recent blog post, we discuss the Louisiana Prompt Pay Statute. The Louisiana Private Works Act allows unpaid contractors to file a lien to enforce their rights and obtain payment.
- Defective Workmanship
- Often viewed as a collection issue, owners will seek to justify withholding monies owed due to claims of defective work. Defective workmanship claims can be an offset to payments due.
- Liquidated Damages
- Liquidated Damages clauses are present in almost every construction contract, however, they are not always enforceable. Because of Louisiana public policy considerations, some liquidated damages clauses which are determined to be unreasonable will not be enforced.
- Venue Provisions
- Some contracts contain forum selection clauses which are not per se However, forum selection clauses selecting out of state venues will typically be null and unenforceable when in-state projects and contractors are concerned.
- Contract Changes
- While we advocate always memorializing change orders in writing, Louisiana courts have held that oral modification can be sufficient to modify written contract terms.
In conclusion, contractors face a variety of issues when attempting to close out jobs and obtain payment. While there are definite remedies available, they are often fraught with technicalities and prohibitive deadlines.