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Understanding the Most Common Reasons for Construction Disputes

Construction disputes happen when one of the parties involved in a project files a complaint with the other parties because it feels that the contract is not being followed as they agreed to it. Any party involved in a project has the ability to raise a dispute, and disputes can be raised for a wide variety of reasons. When this happens, the parties involved need to resolve the dispute through a method of resolution, whether that’s arbitration, legal action, or another solution. In this article, a Houston contractor lawyer helps you understand the most common reasons for construction disputes.

Errors and Omissions

Common problems in a construction contract that can lead to a dispute are errors and omissions. Negotiating a contract is a complex process, and it’s not uncommon for parts of the contract to be worded incorrectly or entire clauses to be left out entirely. This can create serious problems for the company involved because it interferes with how the contract is able to protect those companies.

There are several ways to address errors and omissions in contracts, but the most effective method is to prevent them in the first place. This can be accomplished by putting in the effort to develop the contract to ensure that it is accurate and provides the protections you need. To make this process more effective, many construction companies turn to Houston construction lawyers to help them write their contracts. There are also many free options online developed by lawyers to help construction companies improve the overall quality of their contracts.

Related: Avoid Construction Contract Errors With These 4 Tips

Differing Site Conditions

Another common type of problem that leads to disputes is differing site conditions (DSC). Before a construction project begins, the construction company or the site owner completes detailed surveys of the area that are then used to plan the rest of the construction project. These surveys focus on more than just what is visible to the naked eye. Many companies do deep ground surveys to understand what potential obstacles could pop up as they begin to dig deeper into the ground.

While the effort put into the service is extensive, they don’t find everything all of the time. Once the project begins, differences in conditions on the site that slows down production, such as groundwater at the wrong depth or hard bedrock, can have a significant impact on the rest of the project.

When DSC is discovered, it usually leads to a dispute over who is responsible for the additional costs in fixing the problem. The site owner or the construction company can be held liable for this depending on what they agreed to in the contract. There is almost always going to be disagreement over whether DSC falls under the differing conditions clause in the contract or not. This is where many disputes arise as construction companies face penalties for problems that slow down the construction process for reasons that are out of their control.

Related: Minimize Additional Costs From Differing Site Conditions With This Contract Language

Non-Compliance

Perhaps more than anything else, non-compliance with the contract will lead to a dispute. Non-compliance disputes can become serious problems for construction projects since they can ultimately lead to legal action that can bring a project to a halt. Non-compliance disputes are filed when one company in the contract feels that the other company in the contract is violating the contract in some way. When this happens, a dispute is almost inevitable. 

Contract compliance is one of the main focuses of construction management teams. Their job is to make sure that the company is working in a way that meets its agreements. Otherwise, failure to adhere to the contract means that the legal protections in the contract can be used. Not only can a company find itself having to marshal resources to bring operations back in compliance, but it can also face fines and other legal actions for violating its agreements.

Anytime there is a non-compliance dispute, it’s important for all companies involved to have legal representation in place. Hiring a Houston construction lawyer, for example, ensures that you have someone with legal expertise and the ability to guide your company in the right direction working on your case. Lawyers can also help you understand what actions could violate a contract and help your company avoid issues. 

Related: Simple Tips to Increase Contract Enforceability

Work Quality

Finally, the quality of construction work can lead to disputes, specifically when the work does not meet the agreed-upon standards. Contractors face a serious problem when it comes to accountability for the work that is done on construction projects. Essentially, the contractor is held responsible for all work to be performed on the project, including hiring subcontractors and overseeing all the work that they do. When a contractor feels that the subcontractor did not perform satisfactory work, it can lead to a dispute which needs to be handled as soon as possible.

The simplest way to avoid work quality disputes is to set performance standards before the work starts and to assess the work at different stages to make sure it is being done well. Catching a work quality problem early on means that you can take action to fix it before it turns into a dispute. Work quality disputes that are not handled promptly often turn into legal issues and potential interruptions to the overall project.

Construction contract disputes happen regularly, but they are often resolved before they become serious problems. No construction company wants to deal with legal issues and interruptions to their projects. Instead, construction companies rely on the help of lawyers to find ways that they can avoid the common problems that lead to disputes. If you have any questions about construction contracts, disputes, or how to resolve them, contact a Houston contractor attorney.

If you would like to speak with a Houston contractor attorney, please contact us today.

Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.