Construction Law in Canada

Construction law is the body of law that deals with all matters relating to the construction process.  These include such topics as building contracts, bonds and sureties, construction and builders' liens, tendering, and construction claims, and affect all participants in the construction industry, including financial institutions, architects, builders, engineers and planners.

Construction Law explores the general principles which govern civil liability for the design and construction of building works.  Essentially it is concerned with three key questions which arise in case of the design or construction proving defective-

Who Can Be Sued   

Contractors or builders or concerned agents can be sued for errors while construction and can be held liable for damages to the workers and other injured persons.

Who Can Sue

The workers injured in construction site can sue the contractors/builders for injuries and damages on their part and in case of any death, their families can sue guilty persons who are liable for errors in construction.

Remedies Available to the Injured Party

Compensation is given to the injured persons for errors and negligence of contractors or builders.  Remedies are available for breach of contract by the contractors and if anywhere while construction, any person falls from height or gets injured due to any reason, he/she can sue the concerned contractor for damages etc.

Construction Claims Procedures

Two construction claim procedures can be followed.

Notice requirements

Every construction contract includes notice requirements which impact the parties’ contractual rights and obligations.  Giving timely notice can avoid costly and time consuming errors.  The first and foremost consideration in addressing notice is actual notice language.  Each contract should be carefully reviewed to identify its notice obligations.  The representative who is at the site of the construction should be duly informed about these notice obligations as early as possible in the construction process.  From the owner’s prospective contact should be drafted to ensure that the notice requirements are set forth clearly and unambiguously.  Notice requirements should be fair. 

When a company wants to construct anything, it must properly notify all parties who may be affected by or have an interest in the proposed construction, so that they can have the opportunity to make a submission to the concerned party regarding the proposed construction.  Such notice may include direct notice to affected landowners, communities and others, as well as public notices in local newspapers. 

Dispute resolution provisions

Dispute which is not resolved by discussion and negotiation are send to the arbitrators and mediators for resolution. The panel of arbitrators and mediators shall have the jurisdiction to arbitrate in respect of any matter which the agreement stipulates is to be determined by the arbitration and any matter concerning the interpretation or application of the agreement where the parties agree to be bound by an arbitration decision.    

Canadian Construction Documents Committee (“CCDC”)

Parties enter into a standard form contract, in case of larger projects.  The CCDC has developed a series of licensed contracts for different situations including stipulated price contract for a situation where there are is an owner and general contractor and a design build contract where there is no general contractor.  The CCDC contract is often modified through a series of negotiated supplementary conditions.

The CCDC documents contain partnering language whereby disputes may be resolved by an arbitrator or project consultant early and frequently throughout the progress of the project.