Navigating Construction Contract Disputes

Construction projects are often complex, involving multiple stakeholders, tight deadlines, and significant financial investments. Despite meticulous planning, disputes over contracts are common and can result in costly delays, damaged relationships, and even legal action. At Coffey, Senger, Hancock & Harmon (CSHH), we specialize in resolving construction contract disputes efficiently, ensuring that our clients’ interests are protected and their projects stay on track.

This blog will help you understand the causes of construction contract disputes, how to avoid them, and strategies for effective resolution.

 

Common Causes of Construction Contract Disputes

Construction disputes typically arise from disagreements over the terms, execution, or interpretation of a contract. Below are the most frequent causes:

1. Ambiguities in Contract Terms

Contracts that lack clear, precise language can lead to differing interpretations of roles, responsibilities, and deliverables. For example, disputes may arise over the scope of work, payment schedules, or deadlines.

2. Change Orders

Change orders—modifications to the original contract—are a common source of conflict. Disputes occur when:

• The parties disagree on whether a change order is necessary.
• The additional cost or time for the change isn’t properly documented or approved.

3. Delays and Scheduling Conflicts

Construction projects are often time-sensitive, and delays can have a domino effect on other phases of the project. Disputes may arise when:

• One party claims the delay was beyond their control (e.g., weather or supply chain issues).
• The other party argues that the delay was caused by negligence or mismanagement.

4. Defective Work or Non-Compliance

Claims of substandard work or failure to adhere to building codes and regulations can lead to disputes over who is responsible for correcting the issues and covering associated costs.

5. Payment Disputes

Payment conflicts are one of the most common types of construction disputes, often involving:

• Non-payment or delayed payment by the client.
• Claims of overbilling or underpayment by contractors.

 

Steps to Avoid Construction Contract Disputes

Preventing disputes begins with careful planning and proactive measures. Here’s how you can minimize the likelihood of conflicts:

1. Draft Clear and Comprehensive Contracts

Ensure your construction contracts are detailed and unambiguous. Include clear provisions for:

• Scope of work
• Payment terms
• Project timeline
• Dispute resolution mechanisms (e.g., arbitration or mediation clauses)

Pro Tip: Work with an experienced construction attorney, like those at CSHH, to draft contracts that protect your interests and reduce the risk of disputes.

2. Document Everything

Maintain thorough documentation throughout the project, including:

• Signed contracts and change orders
• Communications (emails, meeting notes, and written agreements)
• Progress reports, inspection records, and payment receipts

Proper documentation provides evidence that can resolve disputes quickly and favorably.

3. Communicate Clearly and Regularly

Open and consistent communication among all stakeholders can prevent misunderstandings. Schedule regular progress meetings and address potential issues as they arise.

4. Establish a Dispute Resolution Process

Include a dispute resolution clause in your contract to specify how disagreements will be handled. Common options include:

• Negotiation: A less formal approach to resolving issues amicably.
• Mediation: A neutral third party helps both sides reach a mutually agreeable solution.
• Arbitration: A legally binding process where an arbitrator resolves the dispute outside of court.

 

Legal Remedies for Construction Contract Disputes

When disputes cannot be resolved amicably, legal action may be necessary. Here are the primary remedies available:

1. Breach of Contract Claims

A breach of contract occurs when one party fails to fulfill its contractual obligations. Legal remedies may include:

• Compensatory Damages: Reimbursement for financial losses resulting from the breach.
• Specific Performance: A court order requiring the breaching party to fulfill their contractual duties.
• Rescission: Termination of the contract, with both parties returning any exchanged value.

2. Mechanic’s Liens

Contractors and subcontractors may file a mechanic’s lien to secure payment for unpaid work or materials. The lien places a legal claim on the property until the dispute is resolved.

3. Quantum Meruit Claims

If no formal contract exists or if the contract is deemed unenforceable, parties may seek compensation under quantum meruit, which allows for payment based on the value of work performed.

 

Resolving Construction Disputes: Best Practices

1. Early Negotiation

In many cases, disputes can be resolved through open dialogue before escalating to formal legal action. Both parties should come to the table with a willingness to compromise and reach a mutually beneficial agreement.

2. Mediation and Arbitration

Mediation and arbitration offer faster, more cost-effective alternatives to litigation. These processes are less adversarial, preserving business relationships and confidentiality.

3. Litigation

When other methods fail, litigation may be necessary. At CSHH, our experienced litigators provide aggressive representation in court, ensuring that your rights and interests are fully protected.

Internal Link: Learn more about our Litigation Services and how we help resolve complex construction disputes.

 

State-Specific Considerations for Construction Disputes

Oklahoma

• Implied Warranties: Oklahoma courts recognize implied warranties of habitability and workmanlike construction, which can be grounds for defect claims.
• Mechanic’s Lien Deadlines: Oklahoma requires lien claims to be filed within 90 days of completing the work or delivering materials.

Kansas

• Right to Cure Law: Kansas requires property owners to provide contractors an opportunity to correct defects before filing a lawsuit, encouraging dispute resolution without litigation.
• Statute of Limitations: Kansas imposes a three-year limit for breach of contract claims related to construction projects.

Missouri

• Prompt Payment Laws: Missouri enforces strict deadlines for payments to contractors and subcontractors, with penalties for late payments.
• Statute of Repose: Construction defect claims must be filed within 10 years of project completion, limiting long-term liability.

 

How CSHH Can Help with Construction Contract Disputes

At CSHH, we bring decades of experience in resolving construction contract disputes. Whether you’re a contractor, developer, or property owner, we’ll provide personalized legal strategies to protect your interests and minimize project disruptions. Our services include:

• Contract drafting and review
• Negotiation and mediation
• Filing and defending mechanic’s liens
• Representation in arbitration and litigation

Our deep knowledge of construction law and state-specific regulations ensures that your case is handled with the utmost professionalism and care.

Internal Link: Explore our Construction Law Services for more information on how we can assist your business.

Proactive Strategies for Successful Projects

Construction contract disputes can derail projects, strain relationships, and lead to significant financial losses. By taking proactive steps—such as drafting clear contracts, maintaining thorough documentation, and resolving disputes early—you can minimize risks and keep your project on track.

When disputes arise, trust the experienced attorneys at Coffey, Senger, Hancock & Harmon to provide expert guidance and representation. Contact us today to discuss how we can help you navigate construction contract disputes effectively.

 

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