Disputes related to construction projects are very common, and it is important that construction contractors and owners in Texas understand some typical causes of these disputes so they can be avoided or mitigated. Knowing the best ways to deal with disputes when they do occur is also an important aspect in the industry.
According to the American Bar Association, there are numerous reasons why construction disputes occur. Common reasons include improper contract administration, incomplete owner requirements or design information, contract ambiguities and the failure to deal with delay claims during a current project. When asked about other issues, contractors list lost labor productivity, project changes and conflicting site conditions as additional causes of disputes and claims.
Because disputes are so common, it is important to know what options are available to resolve them. According to the National Association of Surety Bond Producers, there are four main methods to resolve construction disagreements. They are:
- Litigation – the filing of a lawsuit in the court of law, this option is time-consuming, expensive and extremely public
- Mediation – a non-partial third party helps the two parties come to a fair settlement
- Negotiation – an unassisted or facilitated method to satisfy the interests of both sides
- Arbitration – the dispute is submitted to neutral experts in the industry who make a binding decision based on the evidence
It is best to decide on a dispute resolution method while the contract is being formed. This allows both parties to know ahead of time what procedures will be followed if conflict occurs during the course of the project.