A construction contract dispute can result in wasted time and lost money. Parties to these contracts can mitigate the risk of a disagreement by becoming familiar with some of the common causes. Addressing common issues before beginning can reduce the likelihood that your project will have the same problems.
Problem #1: Failure to understand the contract.
It is not a good sign if the other party simply signs the contract without asking questions. Do they really know what is expected? Take the time to have discussions before signing the contract. Discuss expectations and specific provisions that are important to the project that could be new to the other party.
Problem #2: Delays.
Construction projects can run behind. Reduce the risk of an estimated timeline that is too far off by completing thorough due diligence before putting together estimated schedules to better ensure the timeline is realistic. This is particularly true in today’s market when the pandemic has severely disrupted supply chains on a global level. Take this into account and make plans for potential disruptions.
Solution: There are options for efficient resolution
Although these problems may not rise to the level of a breach of the contract, they can result in frustrated parties and escalate to actions that constitute a breach. In these cases, there are many options for efficient resolution. The first step is often to attempt to negotiate the issue. Ideally, the contract will include a provision that requires negotiation as the first step towards dispute resolution.
If negotiation fails, mediation or arbitration, two forms of alternative dispute resolution, can also provide a solution. These both involve a type of guided negotiation session, using experts to help both parties come to a resolution. If these options fail, litigation is also an option.