Top 3 Ways Owners and Contractors Can Help Resolve Disputes
On construction projects, disputes arise between owners, contractors, and subcontractors far too often. But there are some basic steps each party can take to help resolve these disputes before they become formal claims and end up in court or arbitration.
#1 – Know and Live Your Contract
It is amazing how many people do not know the key details of the project contract. Owners, contractors, and subcontractors need to review the contract in detail and outline both their responsibilities on the project and what the other party is responsible for providing. For owners, this may involve providing access, reviewing and approving information, responding to questions, and more. For contractors and subcontractors, this may involve how they perform work, scheduling and reporting activities, processing changes, providing notices, managing quality and safety, and other requirements. Each party needs to ensure they know these requirements and work to meet them throughout the life of the project.
#2 – Keep Good Documentation
Almost every dispute on a project is resolved based on the documentation that supports or refutes the claim. Owners, contractors, and subcontractors all need to maintain comprehensive documentation throughout the life of the project. This includes documentation from the bidding phase, all contract documents, baseline documentation, communication during the project, and data on how the work progressed. This data would include weather, activities performed each day, material deliveries, labor on the job site, equipment, and other relevant information. Each entity should maintain its own documentation and not rely on the other party to maintain it for the company. Letting another party keep this documentation for the company puts it at risk if the relationship goes sour.
#3 – Address Issues in a Timely Manner
While there is always a strong drive to finish the project and address the issues after the work is done, dealing with the issues contemporaneously will help the parties resolve them. While everyone likes to think they will not forget the details, reality says otherwise. Memories are short, and turnover happens. When the project is complete and the parties start to resolve the issues, the key people may no longer be around to help remember the details of what actually happened. It may require the dedication of additional resources to address the issues while the project is still ongoing, but it is the best way to resolve the dispute without having to resort to formal claims.
While these actions may seem obvious, it is remarkable how often parties in a dispute fail to apply them during the project. At the beginning of a project, everyone is focused on getting the work done and the immediate priorities. But spending the effort on these actions will pay off, in the long run, to help the project stay on track and complete without any major claims.
The content included in this article is for informational purposes only and does not reflect the opinions or recommendations expressed by any individual unless otherwise stated.