Some deals are done on after weeks of negotiation, while others are made on a handshake. Unfortunately, neither method is foolproof, and even the most secure contract can be broken. In many cases, a failure to provide payment will result in a repossession of goods—but what if those goods are a construction project that represents hours of labor and thousands of dollars of raw materials?
3 Ways Unpaid Subcontractors Can Get Payment for Their Work
The most common method for unpaid subcontractors to recover payment is to pursue a lawsuit for breach of contract. However, if no contract exists, subcontractors in Virginia still have a right to recover construction and labor costs by:
- Mechanic’s lien. A mechanic’s lien, also called a construction lien, gives a builder who has supplied labor or materials a right to receive payment for work that he has performed regardless of the success or failure of the project. The lien entitles a builder to ownership of his work (even though it may rest on someone else’s property), and is used as collateral until the property owner or company discharges the debt.
- Unjust enrichment. In cases of unjust enrichment, there is typically no contract between the parties or no price for the work has been set. This law generally states that any “enrichment” to a property should be expected to be paid for, and that the owner or contractor who requested the work has a duty to compensate the subcontractor for providing it. It is up to the court to determine how much is paid to the subcontractor in these cases.
- Quantum meruit. This phrase translates to “respect earned,” and is a legal option that allows the subcontractor to ask the court to award damages based on the value of the work. In these cases, there may have been no contract between the parties, or the contract never specified a price. Since the owner or contractor did not assign a dollar value to the construction project, the court can evaluate the hours worked and costs of materials and calculate an amount of compensation, and also compel the owner to pay.
Can a Contractor Sue Under These Laws If He Signed a Contract?
In most cases, a signed contract that is considered valid in court will only be remedied by a mechanic’s lien. This is because both contracts and liens expressly state how much the value of the work is worth, while the other principles attempt to assign a value. If you have a contract and the other party has not paid, you have a right to file a mechanic’s lien for a breach of contract. Call the number on this page to have the attorneys at Craddock Law tell you what you could be owed.