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Can a project delay justify a lawsuit against a construction firm?

On Behalf of | Nov 14, 2023 | Construction Disputes

There are many complications that can arise during major construction projects, not the least of which are unpredictable delays. Supply chain issues or difficulty finding skilled contractors could lead to a construction project going well beyond the proposed completion date while still unfinished. Property owners often become frustrated and may threaten to sue due to project delays.

Can a significant delay in a construction project warrant a lawsuit against the company doing the work?

Delays can be very expensive

Construction delays create a variety of expenses for the property owner. If it is a residential project, they may need to retain alternative housing for far longer than they anticipated, which could affect their finances. Seasonal changes in material and labor costs can be a factor as well. With commercial projects, businesses potentially lose out on revenue when they cannot open new facilities on schedule. They might also lose talent and client contracts if the facility doesn’t open on schedule. Provided that there are actual financial losses related to a delayed construction project, it may be possible for dissatisfied clients to file a lawsuit against the company doing the work.

Contracts may help limit litigation risk

Many professionals running construction firms recognize that there are factors outside of their control that could delay a project or diminish a client’s satisfaction with the final product. Therefore, they may choose to integrate certain protections into their agreements with clients. For example, they may give an estimated schedule and include rules for notifying clients about project delays. They might also include a requirement to attempt alternative dispute resolution, like mediation, before either party takes the matter to civil court.

Dissatisfied clients can damage a business’s reputation and sometimes demand financial compensation for delays in a project. Identifying risks that could cut into a company’s profits can help executives and owners protect against relatively unforeseeable but challenging circumstances. Seeking legal guidance in the event that trouble arises can help to mitigate any negative consequences that could be associated with a delay.