How can parties limit construction disputes?

Entering into an agreement for a construction project is considered an exciting time for both parties to the agreement. One party will have a home, business, building, roadway or similar projects constructed and the other party will be compensated for the work being completed. Both parties have much to gain in a properly executed construction contract; however, flaws in the project could occur, which could lead to construction disputes.

How can parties limit construction disputes? Parties to a construction contract in Louisiana and elsewhere should consider taking five major steps when initiating a construction project. This not only promotes a successful and timely completion of the project but also helps reduce the complications and disputes that could occur in the process.

First, before putting a construction project in motion, it is important to put forth due diligence. This means considering potential issues or problems so nothing is overlooked. Additionally, this could help the parties to the resulting contract consider the existing and possible problems when drafting the contract.

Next, it is important that a contract is properly constructed. Too often parties forget to consider the details of the project, using a boilerplate or standard document. It is important to consider what is unique to the project and ensure that the needs of both sides are met when reaching terms in the agreement.

Third, when hiring a contractor, it is important to go for quality. It is easy to be swayed by a low bid, but saving money on a project may risk the quality of the project. Therefore, it is important to hire contractors that will be greatly invested in getting the project done correctly.

Fourth, parties to a construction contract should be conscious of the legalities of the project. Specifically, it is important that the construction project complies with local regulations. Additionally, it is important to consider situations where a lien could be placed on the project, such as failing to pay subcontractors or suppliers. Using an experienced contractor is a helpful way to ensure that the regulations impacting the project are complied with.

Lastly, it is important to get proper insurance. People get hurt, property gets damaged and unexpected events could occur on a construction site. It is important to be prepared for these events and obtain adequate insurance for the type of construction project in which they are involved.

While these steps could help reduce the chances of construction disputes, these incidents could still occur. Therefore, it is important to understand how to resolve these types of disputes.

Source: Nreionline.com, “Rules for Achieving Construction Success,” Jack Garson, July 31, 2015