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Parties may address construction disputes in their contracts

On Behalf of | Jul 3, 2022 | Construction Contracts, Construction Disputes |

Disagreements between contractors and developers could delay or halt construction projects. Instead of completing a job, parties may threaten to take legal action to recover lost time and resources. As reported by Construction Dive, the top construction disputes in 2020 involved design conflicts.

In its 2020 engineering report, consulting firm HKA noted that design failures led to the highest number of project scope changes. The involved parties required alterations to project scopes that totaled more than $48 billion. Deficient workmanship and materials also caused disruptions to construction across the U.S.

Addressing design issues and changes

Before starting a project, parties may need to invest more time in discussing their design plans. Creating clear timelines and allocating enough resources may reduce misunderstandings about the proposed designs. Contracts that describe each party’s responsibilities may help prevent disputes after the construction begins.

The American Bar Association’s website notes that contracts may include a clause describing change orders. If the scope of work requires revision, contractors generally need approval from the owner or developer. Adding a change order clause to a contract addresses which activities qualify as an approved revision to the project design. Terms may describe changes and how much they may increase or decrease a project’s costs.

Including construction change directives

Each project revision could require a discussion to come to an agreement regarding price, scope and schedule. Parties may, however, save time by including a construction change directive in their contracts. A CCD could allow unilateral changes without approval from the project’s manager. A project’s timeline may, for example, extend because of a shipping delay.

Construction agreements may include provisions to make changes to project scope and design. Unexpected costs, for example, may halt production, but work could resume by substituting materials. Contracts may contain terms that offer proactive and less time-consuming approaches to resolving potential design disputes.