A construction dispute may arise after parties signed the construction contract. Disputes can be time-consuming, which may delay the completion of construction projects. It is vital to know what the best course of action would be when such disputes arise.
The common causes of construction disputes include:
- Ambiguous contract;
- Failure to complete work on time;
- Failure to follow the plans and specified instructions;
- Failure to make payments as scheduled;
- Overrun budget.
The process to resolve disputes can cost both parties and disrupting the whole construction project. It would always be the best option to seek legal advice before entering into a construction contract. However, it is worthwhile to know what options are when disputes arise.
Check the contract
The contract should set out the details of a construction project that have been agreed on by parties. If the builder or the owner finds out the other party does not comply with the terms of the contract, read the wording of the contract and try to communicate with an open mind. It is also important to go through the terms of the contract to see if there is a clause concerning dispute resolution. Follow the steps set out in the clause to resolve the dispute if there is one.
Negotiation
The most efficient way to resolve a dispute is to reach an agreement by negotiation. Parties should negotiate in a calm and professional manner, and parties should prepare to compromise. During the negotiation, issues in dispute must clearly state to the other side and how the problem should be fixed with a specified time frame.
Mediation
If both parties cannot reach an agreement during the negotiation; mediation could be the option to resolve the dispute. A neutral third party will assist in reaching an agreement between parties by conducting more formal negotiations. The agreement should be in writing and signed by both parties, then it is binding.
Arbitration
Arbitration is a more structured process compare to mediation. Both parties must give consent to conduct an arbitration. An independent third party will act as an arbitrator to make a decision on the matter in dispute. The decision will be binding and enforceable on parties.
Litigation
Litigation should always be the last resort to resolve disputes as court proceedings are time-consuming and expensive. Although the parties can represent themselves in court, it is always good to discuss with a lawyer about their positions and options. After the court hands down the judgment , the parties need to comply with the orders.
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