Hiring a contractor for a home construction project is an exciting yet daunting task. From securing financing to choosing the right contractor for the job, there are many moving parts to consider. However, one critical component that many homeowners may not educate themselves on before embarking on a renovation project is contractor liability. For instance, what happens when a renovation project does not go to plan, and you suffer losses due to the negligence of a contractor?

This blog post will provide a high-level overview of various contractor liability issues that may arise during a construction project. It will also discuss important legal considerations and tips to help ensure you select the right person for the job.

What is Contractor Liability?

Contractor liability refers to a wide variety of issues that can arise when you hire a contractor to perform work on your property, including, but not limited to:

• Property Damage: due to a contractor damaging your property during the course of the construction project.
• Bodily Injury: for example, if you or another person sustains personal injuries due to the contractor’s negligence.
• Product Claims: due to dissatisfaction with supplies or products the contractor obtains and installs during the renovation.
• Contract Disputes: if the contractor fails to complete the renovation on time (per the contract), you may suffer resulting losses.

How is Contractor Liability Determined?

Contractor liability will be determined differently depending on the nature of the claim. Below is a brief overview of how liability is determined for each of the above-mentioned categories.

Property Damage

If a contractor damages the homeowner’s property while completing a renovation project, the homeowner may be able to sue the contractor for property damage. Typically, bringing a claim for property damage is relatively straightforward. For example, suppose a contractor damages furniture in your house while performing a renovation. In that case, you may be able to bring a claim against them for the cost of repairing or replacing the property.

Personal Injury

If a homeowner is injured due to the negligence of a contractor (for example, sustaining an injury on the job site), they must prove that:

• The contractor owed them a duty of care;
• The contractor breached the applicable standard of care;
• The homeowner sustained damages; and
• The negligence of the contractor caused the damages.

If the homeowner establishes the elements above, they may be found entitled to damages for the injuries and losses they suffered due to the contractor’s negligence, including compensatory damages like medical expenses or income loss and non-pecuniary damages such as pain and suffering, emotional distress, and loss of enjoyment of life.

Product Claims

Depending on the nature of the claim, a product liability claim may be brought against a contractor under contract law or tort law. Suppose the product in question was accompanied by a contract or warranty. In that case, the homeowner may be able to claim that the manufacturer failed to meet a condition of the contract and that their failure to meet that condition resulted in a loss to the homeowner. In many cases, bringing a claim in contract law will mean that the homeowner can only bring a claim against the parties to the contract.

If the claim is brought under tort law, the claim is essentially a negligence claim (as outlined under the “Personal Injury” section above). In these cases, the homeowner may seek damages against parties other than those they entered into the contract with. In other words, the homeowner may hold the contractor liable for any resulting losses.

Contract Disputes

Contract disputes concerning contractor liability are typically determined based on the terms of a valid contract between the contractor and the homeowner. In these cases, courts will look to the terms of the contract to determine whether the parties fulfilled their respective obligations. It must be determined whether one party failed to satisfy a term or fulfil their obligations under the contract and whether that failure resulted in losses to the party claiming them. Accordingly, a homeowner seeking damages against a contractor for breach of contract must prove that:

• A valid contract existed between the contractor and the homeowner;
• The contractor breached a term of the contract; and
• The homeowner suffered losses as a result of that breach of contract.

Depending on the circumstances, the homeowner may seek damages from the contractor to compensate them for the breach of contract. In other cases, the homeowner may elect to terminate the contract or to pursue “specific performance” which would require the contract to complete their contractual commitments.

Tips for Hiring a Contractor in Ontario

One of the best ways to avoid contractor liability issues is to do your research and vet contractors carefully before hiring them for a renovation. Some questions that prospective renovators may want to ask themselves before hiring a contractor are listed below.

Am I Satisfied with this Contractor’s Credentials and Experience?

Before hiring a contractor, one of the most important things you can do is request information about their experience and certifications to ensure that the contractor has the necessary experience and skills required to complete the renovation.

This is also a great time to reduce your risk of being a victim of contractor fraud. It can be helpful to check resources like the Consumer Beware List and Consumer Protection Act to confirm that your selected contractor has no complaints or charges against them.

Am I Comfortable with the Proposed Contract?

If you are entering into a contract with a contractor for renovations, be sure to read the contract carefully to ensure you are familiar and comfortable with the agreement. Do not feel pressured to sign any binding documents early, and consider seeking legal advice from an experienced construction lawyer regarding the contract terms and how they may impact your rights.

Remember, too, that you do not need to accept the terms of a contract on its face. If you have reservations regarding particular terms or aspects of the contract, you may speak with the contractor and, if appropriate, negotiate alternative terms.

Does the Contractor Carry Appropriate Insurance?

Many contractors carry construction liability insurance in Ontario, which is legally required by some organizations. At a minimum, liability insurance can bring homeowners peace of mind knowing that coverage is available for any resulting issues. Before hiring a contractor, it is worth asking whether they carry insurance for their professional services and what their policy covers.

Contact Campbell Litigation for Trusted Legal Advice on Construction Disputes

The appropriate preparation can make a tremendous difference in your experience working with a contractor and for the duration of your construction project. Whether you are starting from the ground up on a new build or are seeking to renovate an existing property, Campbell Litigation can help you ensure that your project starts off on the right foot. From various kinds of complex litigation matters such as business and commercial disputes, to personal injury matters, and trial matters, we will work closely with you to understand your concerns, help you manage risk, and ensure your interests remain protected. To schedule an initial consultation with a member of our team, contact us online or by phone at (519) 886-1204.