Contractor Fraud

Important Laws to Consider:

"It is implicit in every building contract that the contractor's work be performed in a good, workmanlike manner, and free from defects in materials or work." See La. Civ. Code art. 2756.

There are two cases that help consider if work is performed properly. Louisiana Fourth Circuit Court of Appeal in Brenner v. Zaleski, 2014-1323, p. 5 (La. App. 4 Cir. 6/3/15); 174 So.3d 76, reversed the trial court because of legal error because the trial court incorrectly ruled that plaintiffs failed to let the contractor was not permitted to complete the job and cure deficiencies. The appellate court reasoned as follows, pertinent in part:

…court considered the application of both La. Civ. Code arts. 2765 and 2769:

These Articles, dealing with the same subject matter, are to be considered together. By so doing, it seems clear that, where an undertaker has fallen down completely in performance of his contract, or, as in the case here, has performed so unskillfully that his work does not fulfill the object of the contract, the proprietor has an absolute right to cancel the agreement. Of course, if a proprietor is not justified in his complaint respecting the performance of the contract, he renders himself liable to the contractor for all such damages as the latter has sustained under Article 2765. See Wickliffe v. Cooper & Sperier, 167 La. 689, 120 So. 52 [(1929)].

On the other hand, if the cancellation of the contract is founded on just ground, the proprietor is entitled to recover the damages he has sustained by reason of the contractor's noncompliance under Article 2769. There is no obligation on the part of the owner to allow a contractor, who has breached his undertaking by the performance of an unskilled and unsuitable job, additional time or opportunity to rectify his work. Id. at 320.

Id. at 5.

The plaintiffs contended that they had the right to terminate the contractor at any time under La. Civ. Code art. 2765. In this matter, the contractor was retained on a construction contract for the building of a loft by the plaintiffs. Id. Prior to the contractor’s completion of the project, the plaintiffs observed what they believed to be cosmetic flaws in his work. Id. Subsequently, home inspector and civil engineer was hired by the plaintiffs to inspect the contractor’s work, particularly the condition of the subflooring. The expert opined that the contractor’s work was substandard and not structurally sound. Plaintiffs then filed suit in against the contractor on grounds of breach of warranty. Id. at 2.

The second case is Vazquez v. Gairens, 26 So.2d 319 (La. App. Orleans 1946), wherein the appellate court held that there is no obligation on the part of the homeowner to allow a contractor, who has breached his undertaking by the performance of an unskilled and unsuitable job, additional time or opportunity to rectify his work. In this case, the contractor filed suit to recover an alleged balance due on a building contract against the homeowners. The contractor argued that “the defendants in this case did not give the plaintiff an opportunity as the law required, but took it upon themselves to enter into a contract with [another contractor] without the knowledge of the plaintiff and without an opportunity on the plaintiff to complete the work.” Id.