Considering the complexity of a construction project and the number of
individuals involved, it is no wonder why
construction litigation is common in our litigious society.
Legal claims and litigation are frequently associated with construction,
but that does not mean that there aren’t things that can be done
to reduce unfavorable scenarios, such as delays, disruptions, and additional
costs, which can lead to lawsuits.
History has taught us that the players and the projects vary widely, but
the disputes themselves do not.
By knowing how and where a conflict can arise, you can plan carefully to
reduce the risk of conflict, and if one does surface, you can address
it swiftly and effectively.
Construction conflicts can often be traced back to the following:
Owner-Drafted Contracts: In such contracts, the owner uses exculpatory language, as well as waivers
and limitations designed to shield the contractor from virtually all claims.
These one-sided contracts do not necessarily prevent claims due to their
lack of fairness.
Unclear Project Delivery Systems: An unclear project delivery system can blur the traditional responsibilities
of the parties involved. Owners should be aware that using a non-traditional
contract increases the risk of misunderstanding, especially when aspects,
such as the scope of work or the compensation are frequently changing
throughout the course of a project.
Poorly-Coordinated Design: If a design is inaccurate or poorly coordinated, it can easily lead to
unanticipated costs, delays, and conflicts among parties. One of the best
ways to reduce the risk of litigation is to have a complete and accurate design.
The owner who does not give the architect sufficient time to complete a
plan and specifications, or adequate compensation for an adequate design
can run into unwanted costs and delays. Conversely, fast-track construction
increases the risk of litigation.
Site Conditions: Some experts believe that contracts should allow for additional compensation
for differing site conditions; this clause protects prudent contractors
from competing contractors underbidding them because they were too negligent
to include such a reasonable clause.
Contractors know that hidden site conditions can mean the difference between
a profitable project and a complete financial loss.
Regardless of the approach towards “site conditions,” the wise
landowner will conduct a subsurface investigation so they have a good
understanding of the site’s conditions before hiring a contractor.
Further, the owner shares the information with the contractor before executing
Other Factors to Consider
We are only scratching the surface in regards to things that should be
addressed in a construction contract and what can go wrong. Other factors
to consider include site services, site monitoring, determining who is
in charge, and subcontractor and supplier submittals, etc.
Construction contracts should be clear so it is easy for all parties to
know their responsibilities. Contractors should provide quality work,
and architects must provide quality designs.
Owners should pay a fair price for these services in a timely fashion.
When these responsibilities are not met, disputes can arise, leading to
If you are involved in a construction dispute, contact Rifkind Patrick
LLC to schedule a
free case evaluation. With
four decades of collective experience in construction law, we are qualified to help you –
call today to get started!