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Does a material substitution warrant construction litigation?

On Behalf of | Jul 17, 2023 | Construction Law |

Construction firms in the Austin area and across Texas in general may have more work than they can handle, as the demand for housing is constant. Additionally, both businesses and individual property owners hiring construction companies or contractors for projects can be very demanding.

A contract negotiated between a property owner and a company providing work will largely regulate the relationship between the two parties and will help clarify the expectations for the project. Especially when a contract has to do with a high-end residential construction or remodeling project, the clients will likely have very specific expectations regarding the materials used and are often happy to pay a premium for specific types of hardwood flooring or countertops, for example.

Occasionally, disputes arise between property owners and service providers related to a substitution of different materials for a project. Is it a breach of contract or a form of fraud for a contractor or construction company to substitute materials when working on a property?

Not all substitutions constitute fraud

There are many circumstances outside of a construction company or contractor’s control that might force a substitution during a construction project. Supply chain issues might mean that it would take months to wait for the delivery of someone’s preferred materials. Political and environmental instability and different regions might result in sudden shortages of certain types of stone, metal or wood that professionals would not necessarily be able to control.

Typically, when substitutions must occur due to factors outside of a business’s control, communication with the client is key for the prevention of challenges later. However, many companies move forward with a substitution and may even attempt to fraudulently misrepresent the substituted materials as what the client initially requested. Especially when there is an attempt to cover up the materials actually used and there is a significant difference in the prices of the two materials, the situation may lead to construction litigation.

What clients can request during litigation

Litigation related to the fraudulent substitution of materials could potentially result in two negative outcomes for the business involved. The courts might order them to financially compensate the client for the difference in price or the impact that the material substitution has had on the final value of the property. That difference could potentially be substantially higher than the difference in price between the two materials. In some cases, a judge might also order a business to correct the issue and redo some of the work to provide the client with the materials they originally paid for and expected to receive.

Challenges inevitably arise during any large-scale project, but businesses and contractors don’t have to lie to their clients about those issues. Construction litigation may very well follow an attempt to push forward with a project without appropriately – and proactively – resolving issues regarding the materials a client has requested.



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