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Resolving Disputes During Construction Projects Without Litigation

On Behalf of | Jan 17, 2020 | Construction Law |

During the construction process, there are a variety of issues that can lead to disputes among the various parties involved. While litigation will sometimes be necessary, it will often be in all parties’ best interests to resolve the issue expediently with minimal costs and delays. Depending on the circumstances involved, there are a number of ways to informally resolve disputes during construction; and, in almost all cases, taking action promptly at the first sign of a dispute (or potential dispute) will provide the greatest opportunity for an out-of-court resolution.

Determining the Parties’ Contractual Rights and Obligations

By their nature, most construction-related disputes arise out of contracts. Construction projects are (or should be) heavily contracted, with virtually all relationships being governed by written terms. So, when a dispute arises, the first question to answer is typically, “What does the contract say?” If the parties’ rights and obligations are clear, then achieving an efficient resolution may simply be a matter of correcting one party’s misunderstanding. Or, if one party is simply incapable of performing, then moving forward will mean exercising the non-defaulting party’s remedies under the agreement (such as executing on a lien or engaging a replacement contractor). In this latter scenario, additional legal action may be necessary, but it may be possible to address the matter separately will still moving forward with the construction project.

If the relevant contract does not address the issue or leaves the parties’ rights open to interpretation, then the parties will need to find a way to come to terms. If the contract truly does not provide guidance, then the ideal scenario is for both parties to negotiate a reasonable resolution. However, if the stakes are too high, or if one party is unwilling to act reasonably, then it may be necessary to look for leverage or consider invoking the contract’s mandatory mediation or arbitration provision (if one exists).

Resolving Disputes with Property Owners or Buyers

If the dispute involves the property owner or buyer, then the approach may need to be somewhat different. Architects, builders, contractors and other parties must consider whether the dispute is significant enough to consider holding up (and potentially jeopardizing) the project, or whether the best option is to work with the owner or buyer to find an amicable resolution. While property owners and buyers certainly should not be permitted to demand scope changes or withhold payments in violation of their contractual obligations, if there is a desire to avoid litigation, then creative alternatives will need to be explored.

Ultimately, deciding how to approach a dispute during a construction project requires a thorough assessment of the present risks and the potential implications. By making informed and strategic decisions, parties to construction contracts can protect their interests without unnecessarily getting bogged down in litigation.

Speak with a Fort Lauderdale Construction Lawyer Today

Do you need help resolving a construction-related dispute in the Fort Lauderdale area? If so, our lawyers can help. To discuss your options in confidence, please call (954) 928-9568 or request an initial consultation online today.

Founding Partners Damaso W. Saavedra and Allyson D. Goodwin