Construction Law

In today’s world of hi-tech communication, some may think the concepts of establishing a “paper trail” and “getting it in writing” are almost obsolete. Some construction professionals assume it’s enough to have a well-executed contract and rely on text messages and e-mails to communicate with clients, vendors, inspectors, and subcontractors during a building project. Regardless of the job, there should always be a solid documentation process that is well understood and executed to the letter by you and all of your employees.

For the uninitiated, grasping the amount of paperwork involved for a building project, even a simple one-can be mind-boggling. From the job’s initial proposal to the final walk-through, the number of documents and forms is sizeable. Consider a few of these items that must be accounted for, especially if there are ever any legal issues that arise, before, during, or even after the work is complete: proposals, estimates, supply receipts, surveys, inspections, pay stubs, building plans, and all correspondence among all of the parties involved in the endeavor. Communications that rely on digital media and e-mails must also be accounted for.

When a business owner understands what is known in legal terms as the “discovery process,” he or she can then appreciate why thorough documentation of every step is vital. Of course no one ever expects to face legal trouble. However, in the construction industry, there are just too many factors at play to take any chances. To set things up for smooth sailing, there are just a few necessary procedures to follow. The idea of such in-depth record keeping may seem over the top at first, however, if and when a lawsuit rears its ugly head, you’ll be glad the system was in place.

In the act of discovery, information is obtained using all means and methods. This fact-finding is an integral part of prosecuting or defending a lawsuit. Questions are posed by the plaintiff’s legal team, and with the assistance of your attorney, the answers are provided. This will require the production of any or all documents that pertain to any or all phases of the project. It is important to understand that in the discovery period, items may be requested that do not even seem relevant to the case, however, you will be responsible for making them available. A few examples of typical requested articles are:

• Hand written notes, personal or business calendars, and e-mails
• Communications in any form sent by one of your employees to anyone involved in the job, from the client to the subcontractors. Even if the individuals had a friendship or causal acquaintanceship, their transmissions may be viewed as admissible in a court of law.
• Meeting minutes

For the sake of discovery, all documents, including notes jotted down on post-in notes or scrap paper and personal journals can be requested.

To cover all your bases, a system for recording all aspects of the project must be in place.

Creating a system such as this is just as important as developing your contractual documents and is another example of why retaining legal counsel is essential for success. It’s a preventive measure that equates to wearing a seat belt, bike helmet, or installing smoke alarms. Protect yourself with an ironclad document filing system!

Here are the steps to consider:

• Familiarize each employee with the proper procedures for acquiring and filing all paperwork, including e-mails. Ensure that everyone is using the same system for filing whether it’s for paper records or e-mail folders. Also stress that keeping detailed, chronological information is the only way to do it. Encourage everyone to ask if they are ever unsure about the company’s record-keeping system.
• Stress the importance of establishing detailed and clear contracts and proposals. The procedure should follow a logical progression and if one step is skipped, such as unclear points that go unanswered or failure to sign a document, then the process stops until the issue is resolved. Consistency and accountability are the keys to success.
• Know your employees and monitor any inappropriate behavior such as posts on social media sites. Also, insist that they enter all work related items into the company’s computer system rather than keeping it on their personal computer, even if the computer was provided by the firm.
• Keep a special, separate file marked “Problems” or “Unresolved Issues”. If any one, including a client, supplier, subcontractor, employee or inspector voices concern or displeasure during any phase of the work-document it. Having access to such details could be vital if the issue escalates and winds up in a legal dispute.
• When matters from the “Problem File” result in further action being taken, move the paperwork regarding those activities to another special folder labeled, “Legal”. This information should also be kept separate from the other files and ideally in a different location to prevent inadvertent disclosure.
• Finally, explain to all employees that when creating e-mails, letters, faxes, social site posts, or even phone conversations, that the “Grandmother Rules” should be followed. That is, mind your manners, follow the Golden Rule, when in doubt-don’t, and treat everyone with respect.

If you would like to discuss ways to mange your construction firm’s files and important papers, Wilmington attorney Wesley Scott Jones is just a phone call away. Wes has represented numerous construction and home building  professionals in the greater Wilmington area, including architects, developers, contractors, and subcontractors. His office is located in beautiful Lumina Station across from Landfall just before the Wrightsville Beach bridge in Wilmington, NC. Please, call today for a free consultation – 910-256-5800.