Sometimes construction projects end in disputes between the General Contractor and the client or owner. Also, regularly disputes occur between the General Contractor (Main Contractor) and their Subcontractors or Suppliers. These disputes can end in legal action, result in media attention and even disrupt the project - sometimes bringing it to a halt. Usually it’s only lawyers that benefit from these disputes. Yet, somehow disputes are becoming more frequent on construction projects, almost becoming a way of business for some.
Why disputes should be avoided
Where possible disputes should be avoided because they:
Generally most disputes can be avoided if appropriate actions are taken, such as ensuring:
Sometimes a dispute is unavoidable, but I’ve generally found that most construction variations and claims can be amicably settled without going down the dispute resolution or legal process.
When disputes are unavoidable
Unfortunately disputes which cannot be resolved do arise, and then it’s important to follow the dispute resolution process stipulated in the contract. Only as a last resort should you proceed down the legal route. Having said this, though, do not hesitate to ask for a legal opinion or for expert advice. Of course also ensure that senior management is aware of the problems and the next steps being considered.
Just because there is a dispute doesn’t mean you can walk off the project. Sometimes construction companies do this, but it could be a fatal mistake if the proper termination procedures haven’t been followed, and may allow the client to take action against the contractor for breach of contract.
Contractors need to be contractually astute. They need to understand the terms and conditions of the contract when they price the project, ensuring they are acceptable. These terms and conditions should be checked before the contract is signed. Project Managers need to understand their contracts and ensure they administer the project in terms of the conditions. By being proactive and knowledgeable most disputes can be avoided.
For other similar articles read:
15 Questions to ask before starting your next construction project
Are you working for free on your construction project
Will your next construction claim be successful?
(Written by Paul Netscher the author of the acclaimed books ‘Successful Construction Project Management: The Practical Guide’ and ‘Building a Successful Construction Company: The Practical Guide’. Both books are available in paperback and e-book from Amazon and other retail outlets. This article is adapted from information included in these books and was first published in qsadvisor www.qsadvisor.com . To read more visit pn-projectmanagement.home)
© 2015 This article is not to be reproduced for commercial purposes without written permission from the author.
Copyright 2016 - The attached articles cannot be reproduced for commercial purposes without the consent of the author.
The opinions expressed in the attached articles are those of the writer. It should be noted that projects are varied and different laws and restrictions apply which depend on the location of the contractor and the project. It's important that the reader uses the supplied information taking cognisance of their particular circumstances. The writer assumes no responsibility or liability for any loss of any kind arising from the reader using the information or advice contained herein.
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