Construction contract disputes may arise for all manner of reasons, depending on the specifics of the job itself and the unique contract being used. However, tracking some of the most common reasons helps both contractors and clients understand how these disputes often begin, what can be done to prevent them and what legal options exist when a dispute is unavoidable.
Here are four main reasons for disputes:
- There are significant delays. The contractor says the house will be done by June 1. It's still not finished on July 1. Delays could be due to issues with materials and the supply chain, which may be out of the contractor's hands, but clients are still angry that the contract was not fully honored as written.
- One side did not understand the contract. Assumptions and miscommunication lead to a lot of avoidable disputes. For instance, perhaps June 1 was not a hard deadline, even though the client believed that it was.
- One party is making unsubstantiated claims. This could be done willfully or accidentally, but it can lead to a dispute even when the contract was actually followed correctly.
- The contract was not administered properly. In the most extreme cases, this means the job was never done at all.
The key is for both parties to really take the time to go over the contract in advance and understand what is being asked and what each party agrees to. Making assumptions or failing to communicate clearly can lead to serious disputes weeks or months later. If this happens, potentially with a lot of money on the line, it's very important for those involved to know all of their legal rights.
Source: CE Risk Management, "Six Tips for Successfully Resolving Construction Disputes," Vic Lance, accessed March 14, 2018