REALWorld Law


General construction law

What are the main sources of law that govern and regulate contracts for the design or carrying out of building works?

United States

United States

The US has three branches of government: judicial, legislative, and executive. Each branch contributes to the body of law governing design and construction contracts. Those main sources of law are common law, statutory law, and regulatory and administrative law, described below. A construction project may be subject to different laws, depending upon, among other conditions, whether the project is private or public, the jurisdiction in which the project is located, and the nature of the project.

Common law

Common law, created by the judicial branch of government, consists of published decisions made by courts and certain other tribunals deciding disputes between parties. A judge charged with deciding a case is obligated to employ the same reasoning as previous judges who sat in superior courts within the same jurisdiction as the current case is being heard and must reach a decision consistent with what was decided in those former cases (decisions in cases that are not superior or are outside the jurisdiction may be persuasive but are not binding). This method of deciding a case, called stare decisis, creates a unified body of law referred to as common law.

Statutory law

Statutory law, created by the legislative branch of government, consists of laws made by legislatures at the national, state, and local levels. The resulting laws are referred to as statutes. A group of statutes on the same topic, for example, design or construction, can be grouped or arranged together, resulting in a ‘code’ or an ‘act’.

A legislature can create statutes for a multitude of reasons, including: to create new law; to change existing law; to supplement existing law; to shape emerging law, including law made by another branch of government; or to codify common law. If a dispute arises involving a statute that the parties cannot otherwise resolve, a judge from the judicial branch of government will interpret the statute and resolve the dispute based on common law.

Regulatory and administrative law

Regulatory and administrative law, created by the executive branch of government, consists of rules and regulations made by governmental agencies at the national, state and local levels. The relationship between regulatory/administrative law and common law is similar to the relationship between statutory law and common law. If a dispute arises that the parties cannot otherwise resolve, a judge will interpret the rule or regulation and decide the dispute based on common law.