AN OVERVIEW OF CONSTRUCTION CONTRACT DISPUTES

Scott Orenstein
(203) 640-8825
CONSTRUCTION CONTRACT DISPUTE PRACTICE GROUP

During a construction project, many different types of disputes may arise between the parties.  A contractor may claim entitlement to additional contract time and/or additional compensation because of changed conditions, extra work, delay, acceleration, lost productivity, defective plans and specifications, and the like.  Similarly, an owner may claim damages for defective work and/or a contractor’s failure to complete the work on time.  In addition, the owner or the contractor may have reason to make claim against the project’s architect or engineer due to a deficient design and/or a failure to properly provide construction administration services.

Our Construction Contract Dispute Practice Group typically assists general contractors, construction managers, subcontractors and/or suppliers with any of the foregoing issues, but occasionally we assist owners and/or design professionals as well.

CONTRACT REVIEW

Today, having good, written contracts is a must.  No longer should anyone rely upon “handshake” or verbal contracts.  Verbal agreements are legally binding, but the lack of a written contract increases the potential that the parties may disagree upon their respective duties and obligations. 

NEGOTIATING A CONSTRUCTION CONTRACT CLAIM CAN FEEL LIKE LEGALIZED EXTORTION

Contractors often end up with monetary claims for nonpayment, changed conditions and/or additional work that are difficult to negotiate. Such claims are often met with counterclaims for defective work, and/or contractual defenses such as lack of notice and/or the lack of a written change order. Defeating such counterclaims are often difficult, but, when it comes to negotiating a settlement of a contractor’s monetary claim, the real difficulty is with the potential attorneys’ and/or costs associated with litigation or arbitration. Even a contractor with a six figure claim amount must seriously consider the attorney’s fees associated with litigating a matter to a final judgment or award in addition to the costs associated with the time its organization spends preparing for and attending any dispute resolution proceeding not to mention the risks associated with putting your fate in the hands of a third party whether that be a judge, jury or arbitration panel.

Anyone who has participated in a mediation has likely heard a mediator say, “Well, if you don’t like that offer, you are going to have to pay your attorneys a majority and/or all of the difference between your claim amount and what is being offered now, and,