A contract can be a roofer’s best friend because it will contain terms that will assist the roofer in collecting money or defending claims. Although this article will not discuss all the provisions needed in a good residential roofing contract, it will focus on three important provisions that every residential roofing contract should include.
- Notice Provision. All residential roofing contracts should contain a notice provision which requires that the owner notify the contractor of any defects or claims within a certain time period. The notice provision must be clear and unambiguous and should also provide that failure to provide the contractor with notice results in the owner waiving any damages arising out of that claim. The courts have strictly construed these notice provisions and have required that the contractor provide the owner with a reasonable period of time to notify the contractor. All notice provisions should require that the notice be provided in writing to avoid confusion.
- Legal Costs Provision. All residential construction contracts should contain a legal costs provision which allows the contractor to obtain legal costs in the event it has to seek payment or defend claims against the owner. The contractor should be aware that legal costs provisions generally are considered reciprocal. Therefore, if the owner succeeds against the contractor, the owner will be entitled to its legal costs that it incurred against the contractor. A legal costs provision not only provides the contractor with the opportunity to collect its legal costs, but also gives the contractor’s lawyer an additional settlement tool that may encourage an owner to settle because of the risk of the owner having to pay for the contractor’s legal costs. Keep in mind, depending on which Province you are in different types of legal costs can be awarded for or against you depending on the outcome of any litigation that may commence.
- Venue Provision. Contractors (especially contractors that perform work in more than one Province) should include a venue provision in their residential roofing contract. The venue provision governs where a case can be brought based on the contract. For example, assume you are doing work in Toronto but your venue provision provides that you can only sue or be sued in Calgary, where your main office is located. If a dispute arises out of the contract and the venue clause is specifically worded, the owner will have to sue you in Calgary, not Toronto. Obviously, this is beneficial for the contractor because the contractor has less travel expense and may be able to use local contacts for expert witnesses.
Contractors should routinely review their residential roofing contract to make sure that it contains the most current terms and that the terms are enforceable. This article has touched on a few of the more important provisions to include in residential construction contracts. However, depending upon the nature of your work and the geographic location, there may be additional terms worth considering. Your residential roofing contract should be viewed as a helpful tool providing you with terms necessary to seek payment and to defend claims against owners if necessary.
Written by Jeremy Power, a lawyer in our Toronto office, with source material from The New York Times.