Well-drafted construction contracts are crucial to ensure that all parties involved understand their obligations. They establish the timeline for the project and clearly define the scope of work. While a strong contract can mitigate risk and minimize the potential for misunderstandings, disputes can still occur that lead to arbitration, mediation, and litigation. The following are some of the most commonly litigated issues in construction contracts and what you can do to avoid them:
1. Ambiguous Terms
If the terms of a construction contract are unclear or ambiguous, the parties may disagree about issues such as the scope of work, payment terms, timing, or termination. Contracts that leave room for interpretation can significantly increase the risk of disputes. It’s essential to work with an experienced attorney who can draft and negotiate a construction contract with clear and concise terms to avoid financial loss, delay, and potential litigation.
2. Change Orders
Change orders are written amendments to a construction contract that modify the scope, timeline, or cost of a project. They are standard in the construction industry and may be necessary when unexpected conditions arise or the needs of a project change. However, when a contract does not clearly outline the procedures for handling a change order, disputes can arise over compensation, delay, or whether the additional work was authorized.
3. Time Extensions and Delays
Requests for time extensions and delays in project timelines are common causes of litigation in the construction industry. Whether a delay has to do with scheduling issues, changed worksite conditions, material delivery delays, or labor shortages, questions can arise regarding who is responsible and whether the delay is excusable. Parties may also argue over the enforceability of a “no damages for delay” clause in the contract, which would bar a contractor from seeking compensation for project delays — and make a time extension the sole remedy.
4. Quality of Work
Once the project is underway or completed, quality of work issues may arise. Since these disputes typically involve latent defects, safety violations, code compliance issues, and potential warranty coverage issues, it’s not uncommon for these matters to lead to litigation.
Some examples of quality of work issues that result in litigation can include disputes over:
- Design defects due to errors in architectural or engineering design
- Use of lower-quality materials than those specified in the contract
- Failure to follow the approved design plan and specifications
- Faulty workmanship
- Failure to meet industry standards
- Building code violations
It’s critical to have a well-drafted contract in place that clearly outlines the scope of the work, the specific quality standards, and procedures for inspection and quality control. A solid construction contract should also identify resolution methods for handling quality of work disputes. This can help ensure that all parties’ expectations are aligned and measures are in place to handle disagreements before resorting to litigation.
5. Contract Termination
Disputes in connection with the termination of a construction contract commonly involve issues of improper notice, the right to terminate, and whether the proper process was followed. The parties may disagree about liability for project costs, payment for work completed, and penalties resulting from the contract termination. While some construction contracts give a party the right to terminate for cause, there may be a conflict over whether the necessary conditions were met.
Contact an Experienced New York Construction Litigation Attorney
If you are facing a construction dispute, it’s important to have a trusted construction litigation attorney by your side to safeguard your business and financial interests. At Barnes & Barnes, P.C., we handle a wide range of construction law matters and are dedicated to helping each client achieve the best possible results in their case. Contact us at (516) 673-0674 to schedule a consultation and learn how we can assist you.
