Most common causes of construction disputes and how to avoid them

When a construction project goes smoothly—i.e. everything gets done and everyone gets paid on time—a construction contract isn’t usually a cause of concern. However, when things don’t go as planned, or disputes do arise, every word of the contract suddenly becomes extremely important.

Experienced contractors know that half of the construction business revolves around drafting well-structured contracts. These contracts can help protect business owners when conflicts occur.

The most common construction disputes

A construction project involves a number of parties. There is usually a landowner, a general contractor, a few sub-contractors and a designer. All these parties pursue a common goal, and the contract establishes the responsibilities of each party for that project.

According to the National Real Estate Investor, many of the most common causes of construction disputes revolve around contracts. These include:

  • Contract Omissions: If a contract fails to foresee a potential issue, there is likely to be a dispute.
  • Contract Errors: Failing to properly administer a contract is also a common cause for disputes. These can include errors made in drafting a contract, negotiating its terms or executing it.
  • Contract noncompliance: This becomes an issue when one party does not deliver on one or more of their obligations. While a contract cannot prevent this issue, it can make the dispute resolution process a lot easier if the issue does arise.

Preventing disputes

When it comes to the construction business, having a well-drafted contract can save your business a lot of headaches down the road.

Retaining the services of a lawyer to help review and negotiate your contracts can prevent you from costly litigation.

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