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Resolving Building And Construction Disputes

When constructing or renovating office or residential buildings, the parties initiating these projects may experience different disagreements with contractors, including disputes linked to the quality of the work, not finishing the project on time, or other contentious scenarios. If this happens, there are options available that can help overcome these issues in a timely and economical manner. Learn some strategies for resolving building and construction disputes, and discover how a knowledgeable New York business litigation lawyer might aid companies encountering these types of disagreements; speak to Schwab & Gasparini today by calling our Syracuse office at (315) 422-1333, our White Plains and Hudson Valley locations at (914) 304-4353, or our Albany site at (518) 591-4664.

What Are Building and Construction Disputes?

Construction and building disputes refer to disagreements among the different parties associated with a construction project; these disputes typically arise between building owners and contractors, but they can also involve architects, subcontractors, suppliers, and property developers. While construction disagreements do not automatically constitute contractual breaches, they may result in a breach, the termination of the contract, or other legal consequences. The common types of construction and building altercations include the following:

 

• Project delays: Delays in construction projects can cause disputes concerning who is responsible for them and the costs incurred as a result of the delays.

• Completion date changes: Changes to the completion date of a project can increase total project costs; for instance, contractors might incur costs for extra equipment hire and labor. This can impact contractors’ other projects, leading to profit losses and disputes. 

• Design errors: Design teams may transfer their contractual responsibility to contractors after releasing designs; in this scenario, if there is a design error, it would be the contractor’s responsibility to resolve the design issue, which can lead to conflict. Furthermore, if the contractor fails to fix the problem, resulting in a completed project with design flaws, disputes may arise between the contractor and the building owner.

• Conflicting goals: Construction projects often involve various parties, each employing many personnel and having their own commitments and goals. When these goals conflict with other project participants, construction disputes are likely to happen.

• Material quality issues: Occasionally, disputes can arise due to the quality of materials utilized in the project. Each party may have varied views regarding material and building quality in relation to the contract’s requirements, which can result in extra project costs if not resolved.

• Challenging projects: Complex construction projects require thorough risk assessments before the work can commence, and when these do not take place or are inadequate, this can cause disputes.

What Causes Construction Disputes?

Construction disputes occur when one or both parties violate an element of a construction contract. According to the American Bar Association (ABA), one of the main causes of construction disputes is when one or more parties fail to understand or comply with their contractual obligations; this often happens due to the use of unclear, vague language in the contract. Below is a detailed explanation of how the behavior of contractual parties can cause these disputes, alongside the other factors that may cause these disagreements to arise.

Party Behavior

Contractual problems may come about when contracts fail to cover certain areas; in these scenarios, the contractual parties can have different opinions regarding the facts of the contract and may look to maximize gains from the other parties. In addition, a party might have impractical expectations, making it challenging to reach agreements that please all parties. Construction disputes may also take place when a party attempts to avoid liability by refusing to fulfill their contractual responsibilities.

Understand more regarding the methods of resolving building and construction disputes, and find out how an experienced New York business litigation attorney may aid business owners with contractor disagreements. Contact Schwab & Gasparini today to organize a consultation.

Contractual Issues

Common contractual issues leading to construction disputes include omissions or errors in the contract. Construction contracts typically stipulate each party’s risk and obligations, but because of the rigidity of these agreements, they can gradually become unsustainable, forcing contractual parties to operate according to uncertain terms. This can lead to shifting obligations and risks between the entities that enter into the contract, resulting in disputes.

Project Uncertainty

High project uncertainty means construction project stakeholders struggle to effectively plan for all elements of the project before building begins. In addition, uncertainty surrounding the project means the specifications and details are likely to change throughout, giving rise to disagreements.

What Is the Best Way To Resolve Construction Disputes?

Negotiation is typically the starting point for dealing with building disputes, after which the disgruntled parties may consider alternative dispute resolution (ADR). Per the Project Management Institute (PMI), ADR refers to the strategies used to resolve disputes without pursuing litigation, such as arbitration and mediation, often utilized to conclude construction disputes. In addition, litigation is an option when ADR cannot resolve these disagreements; below is an explanation of these approaches.

Negotiation

Typically the initial approach taken to resolve construction disputes, negotiation refers to the process of attempting to settle differences and amicably conclude disagreements through discourse. Negotiation is the cheapest and easiest strategy for concluding building and construction altercations and can potentially produce immediate results. Sometimes, negotiation fails to solve these disagreements, but when this happens, it usually outlines the areas of contention, which can help aid other resolution processes.

Arbitration

A popular choice in the construction industry for resolving disputes, arbitration is similar to mediation in that it involves hiring a third party to help solve the issue. But, in contrast to mediation, this individual (known as the arbitrator) provides a final, legally binding verdict. Due to this difference, arbitration usually costs more than mediation.

Mediation

Mediation involves bringing in an impartial third party to assist with overcoming a disagreement; importantly, the mediator helps to conclude the process and does not make any rulings. While not legally binding, mediation is an effective method for solving a dispute outside of court before it can escalate to litigation.

Litigation

Litigation results in legally binding and enforceable rulings by a court that can help end construction disputes. While this process is highly thorough and conclusive, it can be more complex, time-consuming, and expensive than other resolution methods.

How To Prevent Construction Disputes

Alongside implementing strategies for resolving construction disputes, there are various approaches available that can help stop these disagreements from arising before they have a chance to escalate. Here are some methods of preventing building and construction conflicts:

 

• Conducting effective risk management
• Maintaining communication between parties during all stages of the building process
• Having clear payment terms
• Keeping accurate, complete records in writing and sharing these with all project participants
• Ensuring all contractual parties understand the contract thoroughly to encourage project participants to follow its provisions

Speak to a New York Business Litigation Attorney To Find Out More

Contentious scenarios involving contractors and business owners may quickly escalate, leading to costly and time-consuming effects for construction projects. However, companies can implement several strategies, such as negotiation, arbitration, and mediation, to promptly resolve these situations without incurring significant costs; this, coupled with adopting dispute mitigation strategies, can boost the chances of a construction project’s success. Find out more about preventing and resolving building and construction disputes, and learn how Schwab & Gasparini can assist when litigation is necessary to end these disagreements; call (315) 422-1333, (518) 591-4664, or (914) 304-4353 to speak to a seasoned New York business litigation attorney at our Syracuse, Albany, or Hudson Valley and White Plains offices.

 

Sun Oct 20 2024, 12:00am