Protecting Your Investment: How to Enforce a Commercial Construction Contract

Commercial construction projects are high-stakes ventures. Whether you’re developing retail space, building an office, or completing a tenant build-out, time truly is money. So when a contractor fails to meet deadlines, delivers substandard work, or walks off the job altogether, the financial impact can be devastating.

Fortunately, your commercial construction contract isn’t just paperwork — it’s your most powerful legal tool. At Davis Law Group Trial Attorneys, we help business owners and developers enforce these contracts, recover damages, and protect their investments when projects go off track.

Here’s how to safeguard your rights and enforce your agreement when your contractor doesn’t perform.

1. Know What’s in Your Contract

Your first step is always to revisit the agreement. A strong commercial construction contract should include:

• A detailed scope of work with project milestones

• Payment terms tied to progress inspections

• Completion deadlines and penalties for delay

• Default and termination clauses

• Dispute resolution procedures (mediation, arbitration, or litigation)

• Bonding, insurance, and indemnity requirements

These provisions dictate what remedies are available if your contractor breaches the contract. If the contract is silent or poorly written, Georgia law may still provide certain implied protections — but enforcing them will be more difficult.

2. Document Performance Issues in Real Time

In commercial projects, documentation is everything. As soon as you identify a problem — missed deadlines, defective materials, or safety violations — start keeping a paper trail.

Record the issue with:

• Written notices or emails to the contractor

• Daily logs or photos of the site

• Copies of inspection or punch-list reports

These records prove that you gave the contractor notice and an opportunity to cure before escalation — which is essential for enforcing the contract later.

3. Send a Notice of Default or Demand to Cure

If the contractor fails to correct problems promptly, your next step is to send a formal notice of default (also called a demand to cure).

This letter should:

• Identify the specific contractual breaches,

• Reference the applicable clauses in the agreement, and

• Provide a clear deadline (often 7–10 days) to remedy the default.

If the contractor fails to comply, the notice gives you the right to terminate the agreement and pursue your legal remedies.

Tip: Always have an attorney draft or review this letter to preserve your claims and avoid allegations that you breached the contract first.

4. Enforce Payment and Performance Protections

Many commercial construction agreements include performance bonds or payment bonds, particularly for larger projects. These instruments protect owners if the contractor defaults.

• Performance Bond: Ensures the project is completed according to the contract.

• Payment Bond: Protects against unpaid subcontractor or supplier claims.

If your contractor fails to deliver, your attorney can initiate a claim under the bond to recover damages or have the project completed by a bonded replacement contractor.

5. Calculate and Recover Damages

When a contractor breaches, you may be entitled to recover:

• Direct damages: The cost to complete or repair defective work.

• Delay damages: Lost rent or business income caused by late delivery.

• Consequential damages: Losses that naturally result from the breach (e.g., tenant cancellations).

• Attorney’s fees: In cases where the contract allows or the contractor acted in bad faith.

Precise calculation is critical — our firm often works with construction cost experts and forensic accountants to document losses accurately.

6. Defend Against Improper Liens

Contractor disputes often escalate to mechanic’s lien filings, even when the contractor is the party in breach. In Georgia, property owners have strong defenses if:

• The contractor was unlicensed,

• The work was incomplete or defective, or

• The contractor failed to follow Georgia’s lien statutes (O.C.G.A. § 44-14-360 et seq.).

An attorney can help you file a Lien Discharge Bond or a Petition to Cancel Lien to clear title and keep your financing or sale plans on track.

7. Use Mediation or Litigation Strategically

Depending on the project’s size and urgency, enforcing a contract may involve:

• Mediation to reach a business-friendly resolution,

• Arbitration if required by contract, or

• Litigation in Georgia Superior Court for breach of contract or fraud.

Our firm tailors strategy based on leverage — whether that’s stopping an improper lien, enforcing a bond, or pursuing damages in court.

8. Strengthen Future Contracts

Once the dust settles, use the experience to protect yourself moving forward. Future construction contracts should include:

• Retainage provisions (5–10%)

• “Time is of the essence” clauses

• Liquidated damages for delays

• Attorney’s fees and prevailing-party clauses

• Insurance and bonding verification requirements

Having your attorney draft or review these terms before signing can prevent most disputes altogether.

Bottom Line

When a contractor fails to perform, your commercial construction contract becomes your roadmap to recovery. The key is acting quickly, preserving documentation, and enforcing your rights with precision.

At Davis Law Group Trial Attorneys, we represent property owners, developers, and investors across Georgia in construction disputes — from demand letters and bond claims to full-scale litigation.

If your commercial project has gone off the rails, call 404-446-2932 or schedule a consultation with our team today. We’ll help you protect your investment and hold the responsible parties accountable.