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Lawsuit filed against developer for unpaid services

Contracts are among the most essential elements of any business relationship. These legal documents establish rules, set expectations and lay out conditions of the relationship so that both parties can be clear on what is to be provided or done. Without these documents, any legal disputes that arise can boil down to one party's word against the other's word.

For instance, recently, a construction company filed a lawsuit against a developer claiming it was never compensated for work it completed for the developer. The lawsuit is seeking over $600,000 for those services as well as other help the construction company provided to the developer. The problem, however, is that there was evidently no contract in place that stated the construction company would be compensated.

The developer named in the lawsuit claims it never agreed to pay the construction company for its role in consulting on the plans leading up to a major hotel development project. It went on to say that the construction company is only asking for money now because it was not awarded the bid on the project.

Reports indicate that the agreement between the two parties was an informal one; it is described as an "understanding" that was based on a history of working together and a relationship between the construction company and the developer's director of construction. However, the director ultimately left that role, which affected the relationship the developer had with the construction company.

It will be up to the courts to decide if the developer does in fact owe the construction company money, or if such an arrangement did not exist. 

No matter how this case is ultimately resolved, it should serve as a critical reminder to construction companies and developers right here in Florida that business relationships don't always play out the way we expect. In order to protect yourself, your relationships and your company, it is wise to have in place a formal contract or agreement that is enforceable and clearly defines the roles and expectations of both parties.

Source: The Buffalo News, "Falls construction company sues Hamister over unpaid work on hotel," Thomas J. Prohaska, July 21, 2016

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