Whether resolved through mediation, arbitration or trial, construction disputes can be costly and time consuming for both project owners and contractors. Construction disputes may involve just a few thousand dollars or may be valued in the billions.
The time required to resolve disputes may span years, and cripple both the contractor’s and owner’s financial resources. To eliminate the risk of being embroiled in a costly construction dispute, some construction firms may not bid certain types of projects and avoid working for owners who have a reputation for contentious relationships with contractors.
In this article, we have outlined a few of the major steps that we feel can reduce or prevent construction disputes based on our collective involvement in thousands of construction projects throughout the world. Since there are many reasons that construction disputes occur, these steps may not necessarily apply to every dispute. Every dispute should be evaluated within the context of its own unique circumstances.