As someone in a high position in a Texas construction company, you understand the need to keep your construction projects going without interruption. Responsible contractors know that a dispute may be inevitable, which is why they include dispute resolution methods in their business contracts. Most of these are alternatives to litigation, and can be used to fit various situations.
Construction Executive explains the dispute resolution methods that are available to construction companies. Some contractors include a negotiation clause, which prompts parties to the contract to work out their differences before resorting to other methods to resolve their dispute. Ideally, negotiation heads off disputes that might progress to litigation that could cost a lot of time and money.
Construction companies may decide to have someone with a neutral perspective try to work out a resolution. Mediation clauses require that disputing parties work with a neutral third party known as a mediator to try to come to a solution. Some companies also include an expert determination clause so that a specialist or an expert can help determine a solution. However, mediators and experts cannot bind the parties to a solution if they fail to agree to it.
In order to make sure resolving a dispute results in a binding decision, contractors sometimes include adjudication clauses. An adjudicator is like a mediator, but unlike a mediator, an adjudicator can come up with a binding decision. Similarly, arbitration clauses provide for an arbitrator to hear a dispute. Much like a judge, arbitrators consider arguments and evidence presented by the opposing sides before coming to a decision.
Construction contracts can include litigation clauses, but generally litigation is resorted to only when other methods of trying to resolve a dispute have failed. While it is true that litigation can result in a legally enforceable resolution, a court case may proceed slowly and be complex to handle. A court ruling might also be appealed, which can drag the process out even longer.
Because dispute resolution is an important part of a contract, consulting with a professional attorney may help you to understand how to include provisions that work best for your company. Keep in mind that this information is only for educational benefit and not legal advice.