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5 tips for avoiding construction contract disputes

Construction projects are rarely easy to manage. In fact, many projects experience delays and lead to contract disputes between general contractors or subcontractors or real estate developers.

 

No one wants to end up in a contentious contract dispute that causes even further project downtime. For those in the construction business, unnecessary delays mean less opportunity to complete a job and take on another project, as well as the possibility that your company’s reputation might be on the line if a big contract isn’t executed well.

Here are five tips for avoiding construction disputes:

  1. Have your contracts reviewed by an attorney to make sure the language within them protects you from any legal issues. Also, have an attorney review any contracts you sign for a developer you will provide work for. Contracts should never be too one-sided, possibly backing one side into a corner where litigation is the only option.
  2. Plan ahead. Every construction project will experience delays. Planning ahead to ensure you order materials well in advance and you have subcontractors lined up for tasks your crew can’t complete will help manage a project better.
  3. Set realistic schedules, deadlines and project costs. Avoid promising work to be completed on a sped-up delivery timeline unless you know you can deliver that. If you or a subcontractor is rushing to complete work, that can lead to shoddy construction. And that will often lead to further delays if the work needs to be redone and will increase costs.
  4. Document work daily. Each day, you should have a log on what work your crew completed, what labor you had on site, any issues that you faced that day and any delays incurred. If your crew couldn’t work for three days because of heavy rain, communicate about the delay with the developer.
  5. Know your contract dispute clause. You should know how to negotiate and settle disputes and whether your contract clause sets mediation or arbitration as the method to settle disputes. Also, many dispute clauses set strict guidelines as to when dispute issues need to be formally communicated—most of the time, that is shortly after a disputed issue arises.

You can never avoid contract disputes completely in the construction industry. However, you can reduce them and work harder and better to avoid them in the future. Following the above tips are the first step in that process.

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