6 TIPS FOR SUCCESSFULLY RESOLVING CONSTRUCTION DISPUTES

Once there is a construction dispute, the parties to the contract may find themselves wondering what the best course of action. Undoubtedly, a dispute is time-consuming and harmful to contractors’ reputation as well as damage any relationship between them and the client. There are things that a contractor should do to avoid disputes.

As a result, we will be laying emphasis on the construction dispute in this article. We will also discuss the six tips for successfully resolving construction disputes. Let’s dive in.

Why Do Construction Disputes Arise?

Construction disputes arise due to disparities between the parties on a contract. They can come from;

Lack of a clear understanding of the conditions as stated in the contract;
Interruptions on a contract;
Disaster when overseeing the contract;
Unsupported or inadequate claims made by the parties involved.

The dispute may not directly breach the contract but can lead to it. To prevent this, the parties involved must take proactive steps to avoid disputes during the course of the project.

Construction Dispute Resolution Methods

When drafting the contract and the dispute resolution clause, there are a number of resolution methods you can go for. They are as listed below:

1. Negotiation

A negotiation clause involves the agreement that if there is a dispute, the contractor and the owner will try to reach a just and satisfactory resolution between themselves. If this doesn’t work, they move on to settle it by other means.

2. Mediation

This clause will suggest the inclusion of a third party in the dispute to mediate and find a solution to resolving the conflict. It is not a legally binding method but can be very effective in figuring a way out of a situation that can otherwise deteriorate.

3. Expert determination

Another alternative way to mediation is to use expert determination. This is used to resolve disputes of a specialist nature or when there is a valuation dispute requiring a specialist’s opinion. Though they cannot legally enforce the resulting decision. If both parties agree to this type of resolution, it will save them time.

4. Adjudication

The adjudication method also includes a neutral third party. Unlike the mediation method, the adjudicator will give a decision, whereas the mediator will assist parties in finding the resolution. If the dispute is not resolved by the decision of the adjudicator, adjudication clauses also include the possibility of applying to a court to enforce the adjudicator’s decision. It is a cost-efficient method that helps operations proceed while the dispute is resolved.

5. Arbitration

If they decide to go for arbitration, they will again have to include a neutral third party to help resolve the dispute. In arbitration, the involved parties agree to the arbitrator who has the relevant experience to engage in the matter. The arbitrator considers documents and facts that concern the situation and can make a decision that favors one side if the parties fail to achieve consensus.

6. Litigation

Finally, litigation is usually also included in the dispute clause. It is adopted if the parties do not find any other way to resolve the dispute. Litigation involves a trial and is legally binding and enforceable, though it can also be appealed. This method is by far the most thorough, complex, and costly way of resolving a dispute.

The Role Of Surety Bonds In Construction Disputes

Surety bonds serve to grant compensation to claimants if there is cause for a claim. Since a bond claim is a costly outcome to contractors and is not desirable, surety companies can also help resolve disputes or minimize damages that have arisen.

Sureties can also provide assistance or suggest possible ways of resolving the dispute and minimize damages for all sides. Hence, contractors must always work with their sureties if a dispute arises.