Construction Disputes

When it comes to the construction industry, it’s not all sunshine and roses out there. Like in any field,
conflicts and disputes can sometimes arise among the various parties involved.

What Are Construction Disputes? 🤔

A construction dispute is a fairly common term you’re likely familiar with if you’ve been in the
construction industry for any meaningful length of time. Simply put, construction disputes refer to
disagreements or conflicts that can arise during or after a construction project.

Construction projects are inherently complex, involving many different elements. They require the
coordinated efforts of diverse stakeholders such as architects, engineers, contractors, subcontractors,
suppliers, and clients. Each of these stakeholders has distinct responsibilities, expectations, and
interests.

Disputes can happen when these interests collide or when there are miscommunications, different
interpretations of contracts, unforeseen project complications, and delays. These disputes can have
serious implications, resulting in project delays, cost overruns, and strained relationships.

However, it’s not all doom and gloom. Understanding the nature and causes of construction disputes is
the first step towards preventing and managing them effectively. With this knowledge, you’ll be better
equipped to work through the complexities of construction projects and foster a more effective and
efficient working environment.

Leading Causes of Construction Disputes

To help you mitigate or avoid construction disputes altogether, you first need to understand the usual
culprits that can lead to these different kinds of disagreements.

Some of the most common reasons why disputes arise include the following:

Delays ⌛

Time is a precious commodity in construction; when projects get delayed, it can have a cascading effect
on everything else, from budgets to stakeholder relationships. For instance, take a project scheduled for
completion in six months, but the timeline gets extended to nine months due to an equipment
malfunction or the unavailability of specific materials. This disrupts the plan and increases the overall
project cost, leading to potential disputes down the line.

Design Errors 📐

Construction projects begin with blueprints. If there are errors or omissions in the design phase, these
can lead to significant problems as the project progresses. Consider the case where the plans call for a
particular type of window that later turns out to be too large for the allotted space. Correcting such
errors can result in extra cost and time, thereby sparking potential disputes.

Scope Changes 📝

Changes in the project’s scope midway through construction can also lead to potential stakeholder
disputes. For example, a client might suddenly want an additional bathroom on their property. These
kinds of abrupt changes can lead to disagreements over project timelines, costs, and contract terms.

Contract Issues 📄

Contracts form the legal backbone of construction projects. If they are unclear or if parties interpret
clauses differently, it can cause disputes. For example, let’s say a contract vaguely defines the quality of
materials to be used, and then the contractor uses a lower quality than the client expected—this kind of
poor planning and communication can easily trigger a dispute.

Payment Disputes 💰

Money-related issues are always sensitive, and disputes can occur over payment terms, outstanding
invoices, or unexpected costs. A contractor might, for example, invoice for extra work that wasn’t
initially agreed upon, leading to potential disagreements among the parties involved.

Differing Site Conditions 🏗️

Sometimes, the actual site conditions can be different from what was initially understood or presented.
For example, the ground may be rockier than expected, making excavation more difficult and costly, and
the difference between anticipated and actual conditions can stir up a prospective dispute.

Recognizing these common causes of various construction disputes is the first step in actually avoiding
them, helping ensure greater satisfaction among all parties involved and keeping the project on track.
Types of Construction Disputes 📚

To help you stay ahead in the construction industry, identifying the core reason and nature behind the
various types of construction disputes early on can help you develop effective strategies for resolving
them.

Legal Disputes ⚖️

Construction projects are tangled in a web of laws and regulations, and any non-compliance can give rise
to disputes. This could be due to violating certain building codes, non-adherence to safety regulations,
or needing to obtain the necessary permits or licenses. A common example would be when a contractor
fails to comply with the stipulated safety guidelines, potentially endangering the workers and leading to
a legal dispute.

Financial Disputes 💸

Finances are a common bone of contention in the construction industry, which can involve various
issues, from disagreements over the cost of completed work, disputes over contract sums, or non-
payment of invoices. The impact of such disputes can be quite substantial, leading to project delays,
work stoppages, or even termination of contracts.

Scheduling Disputes 📅

Time, a vital resource in construction projects, often leads to disagreements when managed poorly.
These disputes typically arise when there are delays in the project timeline due to factors like late
deliveries, slow approvals, or poor task management. For instance, if a key subcontractor fails to
complete their work on time, it could potentially derail the entire project schedule, leading to a
scheduling dispute.

Performance-related Disputes 🔨

These types of disputes are tied to the quality or standard of the completed work, which occurs when
the client or another party feels that the finished work or materials used do not meet the standards
outlined in the contract. An example could be when a contractor uses a lower-quality material than
what was agreed upon in the contract, resulting in a dispute related to the quality of work.
Properly understanding these different types of construction disputes can help better equip you to
manage and even mitigate them. With this knowledge, you can best identify potential dispute scenarios
early and quickly strategize effective ways to address and resolve them.

How To Resolve Construction Disputes

Disputes in construction projects are never fun, and in some cases, can almost feel impossible to
overcome. However, with the right knowledge and strategies behind you, you can get through these
potential disputes successfully and resolve them.

Let’s look at the different methods of dispute resolution out there, which can all help get your project
back on track:

Negotiation 🤝

Often the first step towards resolving disputes, negotiation is a simple, direct approach where the
parties involved communicate to arrive at a mutually agreeable solution. Negotiation can potentially
preserve relationships and is often the quickest and most cost-effective method of dispute resolution.

Mediation 🕊️

When negotiation fails to bridge the gap, mediation can be a powerful tool to help resolves disputes.
Mediation involves a neutral third party, known as a mediator, who facilitates communication between
the conflicting parties and helps guide them to a mutually acceptable solution. It’s important to note
that the mediator doesn’t impose a decision but works to help the parties find common ground.

Arbitration 🔍

If mediation doesn’t resolve the dispute, arbitration could be the next step. In arbitration, a neutral third
party, the arbitrator, examines the facts and makes a binding decision. This process is generally quicker
and less formal than court proceedings, and its binding nature is often preferred in construction
disputes to ensure finality.

Litigation 🏛️
The most formal method of dispute resolution is litigation, involving a court process where a judge or
jury makes a binding decision. While it can be time-consuming and expensive, litigation is sometimes the
only suitable method for complex or high-value disputes that cannot be resolved through other means.

As far as trying to find an attorney specializing in construction disputes goes, there are several different
routes you can take:

Personal referrals from industry colleagues or friends can be invaluable.

Directories of local or national bar associations often list lawyers by their specializations.

🚨 REMEMBER: Always remember, when disputes start getting super complicated or contentious, you
should immediately seek out proper legal advice and counsel. Attorneys specializing in construction
disputes possess the right experience and expertise to navigate the industry’s complex landscape of laws
and regulations and can provide invaluable guidance.

How To Avoid Construction Disputes 🛑

Prevention, as they say, is much better than cure—and it’s definitely no different when it comes to
construction disputes. Avoiding disputes saves time and money, preserves relationships, and ultimately
promotes a healthy work environment.

To help keep your project on track, let’s review some of the best practices and strategies that can help
prevent disputes or at least mitigate their impact.

1️⃣ Keep Clear Communication: Good communication is the backbone of any successful construction
project. Ensure all project goals, plans, and expectations are clearly communicated to all stakeholders
right from the start. Regularly check in with your team, subcontractors, and the client to keep everyone
on the same page.

2️⃣ Have Detailed Contracts: A well-drafted contract can be a lifesaver. Ensure your contracts are
comprehensive, specifying everything from scope of work and payment terms, to timelines and quality
expectations. If any changes occur, update the contract and get it signed by the relevant parties.

3️⃣ Regular Project Meetings: Regular meetings provide a platform for open dialogue, allow for status
updates, and create an opportunity to address any concerns or potential issues. It’s an effective way to
keep everyone informed and nip any brewing disputes in the bud.

4️⃣ Maintain Thorough Documentation: Good record-keeping practices help prevent and resolve
disputes. Document everything from contract changes and email conversations, to work progress and
site conditions. If a dispute arises, this evidence can prove invaluable.
5️⃣ Hire a Good Team: A competent, experienced team can help ensure a project runs smoothly. Take
the time to vet your subcontractors and suppliers. Look for those with a good track record, who
understand their roles and responsibilities, and are committed to delivering quality work.

6️⃣ Seek Legal Advice: Have a lawyer review your contracts and agreements to ensure they are legally
sound. An experienced construction lawyer can help provide guidance to ensure you’re well-protected.

Preventing disputes may not always be possible, but following these strategies can help significantly
reduce the likelihood of disputes occurring, or at least reduce their potential severity if they arise.
Remember, the key to successful construction project management lies not just in executing the work
but also in preventing and managing disputes effectively.

Improve Documentation To Avoid Construction Disputes

Remember how we stressed the importance of comprehensive documentation to help you avoid
potential construction disputes?

A robust construction and field services-focused platform should be designed to provide real-time
tracking and enhanced documentation over all of the activities on your job site, helping you mitigate and
even prevent potential conflicts along the way.

There’s a variety of key information that companies should be capturing to help safeguard themselves
against potential construction disputes, which include the following:

Detailed logs of arrivals and departures for every person on a project site.

Detailed daily progression photos.

Daily written progress reports.

Detailed incident logs.

Capturing this kind of comprehensive data information manually can be overwhelming for firms of all
sizes, not to mention that it can be highly prone to human errors and inefficiencies. This is where
modern mobile field software, can become your best ally—it helps you automate data capture, ensuring
accuracy and saving you valuable time.

1️⃣ Site arrivals and departures: GPS audit trail feature keeps a clear record of who was where and
when, which can be absolutely vital in protecting your company against any potential liabilities and
disputes.

2️⃣ Progress photos: keep and to share photos, notes, and files directly from the field in real-time. This
kind of detailed visual documentation can help offer invaluable insights and avoid potential
miscommunication.

3️⃣ Daily written progress reports: Generate robust and comprehensive field reports. This feature offers
stakeholders remote access, anytime, anywhere, to detailed records of the work done, which helps
significantly reduce the potential for any disputes or misunderstandings.

4️⃣ Incident logs: Efficiently track and record any incident that occurs on the job site. These records can
be essential in investigating incidents, taking preventive measures, and resolving disputes.