Disputes are a natural part of dealing with people. In the construction industry, disputes often arise between owners and contractors. But they can also arise between contractors and suppliers and contractors and workmen.
In most cases, there is a contract signed by both parties before the project begins. This contract usually covers the issue of dispute settlement. However, there are instances where the contract itself is the cause of the dispute. No matter the cause of the dispute, the resolution is the most important thing to note.
Common Causes of Contractor Disputes
Though every case of dispute in construction is unique, there are certain issues that are common to contractor disputes. Some of them include:
1. Breach of contract
Any of the parties to a construction contract can be guilty of a breach of contract. When this breach occurs, the aggrieved party often looks to get some form of compensation; especially if the breach has caused them loss.
2. Late payment
Most construction contracts have a payment schedule. When the paying party does not stick to the schedule, it causes a dispute as the party being owed will explore all possible channels to get their money.
3. Construction Defects
Sometimes, a contractor may use inferior construction materials to save costs. This affects the final outlook of the construction project and often causes disputes.
Resolving Contractor Disputes
Litigation is not the only way to resolve a contractor dispute. In fact, in most construction contracts, a clause that makes alternative and out-of-court settlements compulsory is often inserted.
Two major ways to settle these disputes outside the courtroom are mediation and arbitration. Mediation involves a neutral third-party negotiating with both parties and helping them find a common ground for their resolution. It is preferable for cases that need to be resolved immediately and require a lot of flexibility. For example, a dispute arising due to late payment is better-resolved by using mediation.
Arbitration involves an arbitrator who acts similarly to a judge but the process is less formal than litigation. The end result of arbitration is enforceable in court and is known as an award. This enforceability makes it better for disputes arising from serious breaches of contract and construction defects that have led to a loss.
If these alternative channels are not successful, litigation can then be considered. The dispute can be filed in a small claims court. However, parties are less likely to have a relationship after litigation.
The Role of a Real Estate Lawyer
Real estate lawyers are experts in dealing with real estate and such land related issues. A seasoned real estate attorney can help you draft construction contracts that will protect your interests in the event of a dispute. A clear and concise contract makes disputes less messy and easy to resolve.
If your dispute eventually has to be resolved in court, having a real estate attorney on your side will put your mind at ease.
Protect your interest in your real estate project today. Contact an expert real estate lawyer here to get started.
The Law Offices of Carroll, Papp and Cunabaugh provide a range of legal services to businesses. We can help ensure smooth business operations for you and guarantee you have solid legal representation in case of any events. Explore our services here.