Most construction projects involve a degree of mutual risk. Clients have to trust professionals or businesses with their most valuable resources. Those in the construction sector often have to perform work without advance pay for the full value of the project.
Ideally, with proper communication and thorough contracts, both parties walk away from a construction project feeling satisfied. Realistically, a degree of conflict is likely in any large project. Clients hiring construction companies or contractors and businesses providing construction services often need to have a plan for navigating disputes about contracts and projects.
How can those involved in a construction project manage project disputes?
Establish and uphold a thorough contract
The written agreement signed by both parties is arguably the most important component of any construction project. The terms included in the contract guide everything from the timeline for the project to the materials used. Clients need to be very specific about their expectations regarding the project and the finished work.
Construction companies need to be cautious about protecting themselves from known risks. Clauses addressing the possibility of construction delays or material substitutions are often crucial.
Both parties may also benefit from the inclusion of clauses related to communication and conflict resolution. If a dispute arises, reviewing the contract first can let either party determine whether the situation justifies taking legal action.
Document issues carefully
From communicating in email to issuing receipts for cash payments, the creation of a thorough record of communications and transactions between the parties is of the utmost importance.
Professionals and clients alike may also need to document the status of the project by taking pictures. Clear records make it easier for one party to prove that the other did not pay the full amount due or did not fulfill the terms of the initial agreement.
Consider alternative options
Some construction companies include alternative dispute resolution clauses in their contracts. They require mediation or arbitration before disagreements lead to litigation.
Even if the agreement does not include such clauses, it might be beneficial for frustrated clients or professionals to propose mediation or arbitration. It is sometimes possible to settle matters outside of court in a manner that both parties agree is reasonable. However, if either party refuses alternative dispute resolution or if the process is unsuccessful, then litigation may be necessary.
Those taking construction disputes to court can potentially obtain payment for services rendered, reimbursement for substandard work or an order of specific performance to complete the project. Having support when dealing with a major construction dispute may be beneficial for both businesses operating in the construction sector and those hiring professionals for major construction projects.