Common Construction Contract Pitfalls: What Louisiana Contractors and Property Owners Need to Know
In Louisiana’s fast-paced construction industry, well-drafted contracts are the backbone of every successful project. Whether you’re a contractor, subcontractor, or property owner in New Orleans or anywhere in the state, your construction contract is what protects your timeline, your money, and your legal rights.
Unfortunately, many disputes in Louisiana construction law arise from construction contract pitfalls Louisiana that could have been avoided from the start. From unclear scopes of work to unenforceable clauses, contract mistakes can lead to costly litigation, work stoppages, and payment delays.
If you’re entering into or reviewing a construction agreement in Louisiana, understanding the most common contract pitfalls and how to avoid them is critical. In this guide, we’ll walk you through key issues that frequently cause problems and explain how an experienced Louisiana construction law attorney can help you protect your interests from day one.
- Unclear Scope of Work
One of the most common sources of construction disputes is a poorly defined scope of work. If a contract fails to clearly specify:
- What is being built or renovated
- The materials to be used
- The quality or standards expected
- Specific project phases or timelines
…then misunderstandings are inevitable.
In Louisiana, vague scopes of work open the door for change order disputes, project delays, or claims of incomplete work. It’s crucial that the contract spells out in detail what the contractor is and is not responsible for.
Tip: Don’t rely on verbal agreements or handshakes. If it’s not in writing, it doesn’t protect you. If you’re unsure how to clearly define the scope, consult with a construction contract lawyer in Louisiana before signing.
- Missing or Weak Payment Terms
In a state where construction lien laws are strict and time-sensitive, payment terms need to be airtight. Common payment pitfalls include:
- No schedule for progress payments
- Unclear retainage agreements
- No mention of penalties for late payment or nonpayment
These issues can seriously impact cash flow for contractors and cause major tension between parties. A contract should clearly outline when payments are due, what milestones must be met, and what happens if payment is delayed.
Avoid the risk: Have your payment terms reviewed by a Louisiana construction attorney to ensure you’re not exposed to unnecessary financial risk.
- Inadequate Change Order Procedures
Changes happen on every project—but if your contract doesn’t specify how change orders are approved, it’s a recipe for dispute. Common problems include:
- No requirement that changes be in writing
- No cap on change order costs
- Unilateral change authority
In Louisiana, courts look at contract terms and written documentation when resolving construction disputes. If your contract doesn’t include a clear and mutual change order process, you could end up absorbing costs that weren’t your responsibility.
Protect yourself: Include a detailed and signed change order provision in your agreement. A Louisiana construction lawyer can help make sure it’s enforceable!
- Failure to Address Delays and Force Majeure
The construction world isn’t immune to delays; weather, supply chain issues, or labor shortages can all stall a project. Yet many Louisiana construction contracts don’t adequately address who bears responsibility for delays, how to handle extensions, or what happens when timelines aren’t met.
Force majeure (unforeseeable circumstances or unavoidable events) must also be carefully written. A vague or generic clause may not be enforceable in court.
Be proactive: A delay clause tailored to Louisiana’s legal standards helps avoid later disputes over project completion and penalties.
- Missing Dispute Resolution Terms
What happens when something goes wrong? Without a clause specifying how disputes will be handled (litigation vs. arbitration vs. mediation), you could find yourself dragged into an expensive and time-consuming legal process.
Louisiana construction disputes often involve technical evidence, expert witnesses, and contractual interpretation. Having a dispute resolution provision and selecting the proper venue and forum is essential.
Minimize future costs: A construction lawyer in New Orleans can help you draft an effective dispute resolution clause that protects your interests.
- Not Complying With Louisiana Law
Louisiana has its own set of rules when it comes to contractor licensing, lien rights, notice requirements, and more. Contracts that:
- Don’t comply with Louisiana’s Private Works Act
- Omit required lien notices
- Fail to follow statutory deadlines
…could be unenforceable or even expose you to penalties.
For example, failing to include a Notice of Contract on large residential projects can affect lien rights. Using a generic contract template that doesn’t reflect Louisiana law is a major misstep.
- Unlicensed Contractor Issues
In Louisiana, contractors are required to have a proper license for most projects over $7,500. A contract involving an unlicensed contractor can be voided and may lead to fines, lawsuits, or payment disputes.
Similarly, property owners who hire unlicensed contractors may struggle to enforce contract terms or collect on warranties if the project goes wrong.
- Poorly Drafted Termination Clauses
Termination clauses should clarify how and when either party can exit the agreement, and what happens to work and payments in progress. Contracts without this language—or with one-sided provisions—can result in wrongful termination claims or unpaid work.
Work with our New Orleans construction attorneys to draft balanced termination terms that limit future liability.
Don’t Build on Legal Uncertainty!
Whether you’re launching a commercial project in Metairie or remodeling a home in New Orleans, don’t overlook the contract. Many construction disputes in Louisiana could be avoided by taking the time to draft or review a clear, legally sound agreement.
A well-written construction contract isn’t just paperwork—it’s protection for your investment, your work, and your peace of mind.
📞 Need Help Reviewing a Construction Contract in Louisiana?
At Bloom Legal Network, we connect contractors, property owners, and developers with seasoned construction law attorneys across Louisiana. Our network ensures that your contracts are enforceable, tailored to Louisiana law, and built to reduce risk.
Don’t sign before you’re sure: Contact us today to be matched with a construction lawyer who understands your project and your needs.
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