DISCLAIMER: THE INFORMATION CONTAINED HEREIN IS SOLEY FOR EDUCATIONAL PURPOSES. IT IS NOT LEGAL ADVICE OR LEGAL AUTHORITY AND IS ONLY THE AUTHOR’S INTERPRETATION OF CONSTRUCTION LAW ON THE SPECIFIC ISSUES DISCUSSED.
Sarpy County has consistently been one of the fastest growing counties in Nebraska. With growth comes the need for development and construction. Inevitably, there will be issues with construction that leads to litigation. In Part Two of this five-part series, Adams & Sullivan will delve into the importance of diligent record-keeping and management of records when navigating construction litigation in Nebraska.
Part 2: The Importance of Retaining Records for Construction Litigation in Nebraska
Construction projects are complex endeavors that involve multiple parties, contracts, and variables. Whether you’re a contractor, subcontractor, supplier, or project owner, the reality of potential disputes is a part of the industry. From payment issues to disputes over project delays, construction litigation can arise for many reasons. In Nebraska, as in other states, the ability to retain and properly manage records is crucial for navigating and resolving these disputes.
In this blog post, we’ll explore the importance of retaining records for construction litigation in Nebraska, why it’s vital to maintain accurate documentation, and how it can affect the outcome of your case.
1. Establishing Proof of Contractual Obligations
At the core of many construction disputes there is a misunderstanding or violation of the contract terms. Contracts govern every aspect of a project, from timelines and payments to scope of work and responsibilities. When a dispute arises, clear evidence of what was agreed upon is essential. In certain circumstances, such evidence can include communications between the parties, steps that the parties have taken, and procedures that have taken place.
Why this matters in Nebraska:
In Nebraska, as in most states, the burden of proof in a construction dispute often rests on the party making a claim. Without the appropriate documentation, it becomes significantly harder to prove that either party fulfilled their obligations or failed to do so. By retaining copies of contracts, change-orders, and any correspondence related to contractual obligations, you have a strong foundation to support your case in court.
2. Documenting Communication and Changes
Throughout the life of a construction project, changes to the scope of work or delays are inevitable. Sometimes, these changes are agreed upon verbally, while other times they are reflected in written change orders. If a dispute arises about the scope of work or delays, having clear documentation of these communications is crucial.
Why this matters in Nebraska:
In the event of a construction dispute, Nebraska courts will look for written documentation of agreements, including email exchanges, meeting notes, and change orders. Verbal agreements may be difficult to enforce, as it’s hard to prove what was said and agreed upon without written records. It becomes a “he said/she said” dispute and is not productive. By documenting any and all changes, especially those that impact costs, timelines, or scope of work—you can avoid ambiguity and present a solid case if litigation occurs.
3. Tracking Payments and Financial Transactions
Construction projects involve large sums of money, often paid in multiple installments. Payment disputes, whether over unpaid invoices, missed payments, or disagreements over amounts owed—are a common cause of construction litigation. Retaining accurate records of payments, invoices, receipts, and any related financial transactions is vital in resolving these disputes. This is especially crucial for contractors.
Why this matters in Nebraska:
Nebraska law, particularly those related to a contractor’s or mechanics’ liens, require clear and accurate documentation of payments made or due, in addition to evidence of a timeline of performance. A contractor or subcontractor who has not been paid for their work may file a lien to secure payment, but if you don’t have accurate records to show what has been paid and what is owed, the lien may not be enforceable.
Maintaining detailed financial records ensures that you can support claims for unpaid work or defend against claims that payments have been missed. If there is a dispute about the timing of performance, maintaining records of when work was done can help a party succeed on enforcing a lien or getting one released due to a party’s failure to comply with the strict notice and filing guidelines in Nebraska.
4. Protecting Against Claims of Negligence or Defective Work
Construction projects often lead to claims of defective work, negligence, or failure to meet agreed-upon quality standards. If a contractor or subcontractor faces allegations of defective work, proper documentation can help mitigate these claims.
Why this matters in Nebraska:
In Nebraska, construction professionals have a duty to adhere to industry standards and provide work that meets safety and quality requirements. If a claim of defective work or negligence is filed, you’ll need to demonstrate that you met the appropriate standards. Having inspection reports, quality control records, and even photos of the work completed can help establish that the work was performed to standard and as agreed upon. Additionally, communication records with the project owner or other parties regarding concerns about quality can help defend against negligence claims.
5. Limiting Exposure to Liability
Properly retaining records not only helps support your position in litigation but also helps limit your exposure to liability. By maintaining documentation, you can demonstrate that you took all necessary precautions, adhered to safety regulations, and acted in good faith throughout the project.
Why this matters in Nebraska:
Construction litigation can sometimes involve allegations of breaches of duty, negligence, or even fraud. If you don’t have solid evidence to back up your actions, your exposure to liability increases. In Nebraska, failure to maintain adequate records could make it difficult to defend against claims and potentially result in larger damages awarded against you. Ensuring your records are thorough and well-organized is one of the best ways to protect yourself legally.
6. Meeting Statutory and Regulatory Requirements
Nebraska’s construction laws, including mechanics’ lien laws, warranty periods, and safety regulations, often require certain documentation to be maintained for specific periods. Failing to retain required records could result in penalties or loss of legal rights.
Why this matters in Nebraska:
For example, Nebraska’s mechanics’ lien law has specific requirements about when and how notices should be filed, and having the appropriate records on hand is critical for enforcing a lien. Construction professionals in Nebraska must adhere to these legal requirements, and failing to do so can impact your ability to secure payment or defend against claims. Ensuring that you comply with all statutory and regulatory record-keeping obligations helps prevent potential legal and financial repercussions down the line.
7. Facilitating Efficient Dispute Resolution
When disputes arise, resolving them efficiently and effectively is crucial to minimizing project delays and monetary loss. Properly retained records can facilitate this process by providing clear and concrete evidence of each party’s actions and obligations.
Why this matters in Nebraska:
Nebraska offers various alternative dispute resolution (ADR) methods such as mediation or arbitration, which can often resolve construction disputes faster and more cost-effectively than going to court. Having well-organized records can help facilitate quicker resolutions and may even prevent a formal lawsuit altogether. When both parties have access to clear documentation, it’s easier to reach an agreement or compromise.
Conclusion
Retaining records for construction litigation in Nebraska is not just a matter of compliance, it’s a fundamental part of protecting your business, your reputation, and your bottom line. Whether it’s a dispute over payments, defective work, or contract obligations, having the right records on hand can mean the difference between winning and losing a case. By keeping clear, organized, and thorough records throughout a project, construction professionals in Nebraska can safeguard themselves against costly legal battles and ensure that they are prepared should litigation arise.
About the Author
Adams & Sullivan, PC, LLO
During his time at Adams & Sullivan, Travis has excelled at getting things done, problem solving, negotiating deals to the benefit of his clients, conducting extensive legal research, and getting valued results in numerous adjudicative bodies, including in arbitration, mediation, the U.S. District Court for the District of Nebraska as well as the Eighth Circuit U.S. Court of Appeals. Travis enjoys solving complex legal issues, working through problems to better serve the needs of a client, and aggressively representing construction clients in litigation.
Growing up in Sarpy County, Travis M. Jacott earned his Bachelor’s degree from the University of Nebraska-Omaha and went on to graduate from Creighton University School of Law and was admitted to practice law in the State of Nebraska.