Problems with a construction project can arise in a variety and a multitude of ways. Each stage of a project is susceptible to disputes. Disputes caused by improper workmanship, failure to follow plans and specifications, faulty materials, improper payment and failure to timely complete the work are but a few of occurrences that can lead to lengthy and costly disputes.
If the contractor agreement specified an approximate time for the completion of the project, the general contractor negligently failed to complete the project on time, and the owner suffered damages because of the delay, the owner may claim compensation. An amount of damages can be agreed upon at the time the contractor agreement is signed to cover this kind of breach on the part of the contractor. (This is called liquidated damages.)
Improper payments occurs when the funds are not paid timely, when the wrong amounts are issued, when funds are withheld without justification – and when the recipient uses the funds in an improper manner.
Errors and omissions, in the contract documents, have a direct bearing on the ability of the parties to interpret and agree on the terms of the work covered by the contract. Resolution of these types of disputes are extremely difficult to reach.
Change Orders are common in every project and to be expected. And when they are a minor percentage of the magnitude of the original project, they are usually handled without disruption. However, when changes significantly change the scope of the contract work, disputes often arise – and can be highly difficult to resolve without third party participation.
An owner may object to the quality of workmanship, either by the general contractor or by a subcontractor hired by the general contractor, or to the quality of materials used. It will be much easier to resolve this kind of dispute if the contractor agreement is very clear in specifying what materials to use and how the project is to be done. If the construction contract is vague, and says something like, "good quality materials," the owner may find that his or her idea of good quality is not the same as the contractor's and it will be very difficult to prove what the contract meant.
Actions of contractors may cause damage to the property and/or cause bodily injury during construction of a project – and often do. It is so important to make sure the contractors have proper and up-to-date liability insurance.
Mr. Albers is an expert witness in a court of law, but is not an attorney. If you have legal questions related to any of these topics, please consult an Attorney.