Our Tips to Avoid Construction Disputes
Construction disputes can damage the reputation of all parties involved and cause significant delays and loss of earnings. Nobody wants to have to experience the process of legal action if it is unnecessary – so what can you do to avoid a dispute? Here are our tips.
Ensure that your contract is fitting
This seems obvious, but companies will often put contracts in place that are not tailored to the project and its needs. Seeking advice to create a clear, uncomplicated contract that accurately sets out what will be required from both parties is essential. Furthermore, if you do encounter a contract with ambiguous terms, then you should seek to communicate and resolve these areas with all parties involved at the earliest stage possible.
It should be noted that if you commence work without highlighting any issues, it will likely be assumed that you have accepted the terms of the contract. Early stage procurement and contractual advice from professionals will reduce any potential risks dramatically.
Throughout the project, it is vitally important to remain diligent of record keeping. It is recommended that you keep records of:
- Worksheets and schedules
- When new information regarding the contract is received
- Requests to perform particular aspects of the work in a certain way
- Any changes to the schedule
- Any meetings to discuss issues between parties, problems regarding the work or the contract
- Most importantly, record anything that may be delaying your project as and when these issues arise – what is damaging efficiency?
Clarity and Correspondence
Try to ensure at all stages that the lines of communication between parties are left open. Furthermore, ensure that your programme, as well as any instructions specific to the contract, are appropriately outlined and monitored on a daily basis.
If additional works need to be carried out, agree to costs before you undertake the work as early as possible. If this is not possible, then you should set out to regularly review, agree and sign off on additional costs. Blindly going ahead with work that has not been fully discussed from a financial perspective is obviously likely to cause trouble further down the line. So, don’t allow potential problems to arise if you suspect that communication is slipping – always seek to ensure that everyone involved has clarity as the project evolves. Lastly, don’t ignore the signs if you begin to suspect that the project may not be able to meet requirements and completion as per the terms of the contract. Instead, formally agree to a variation or extension of time. Make sure that any agreements of this nature are recorded in writing.
Payment issues are an extremely common cause for building disputes. They can be incredibly frustrating for all parties involved, especially if proper records are not kept or schedules are not adhered to. Remember, if you are requesting payment, or are seeking to issue a payment or pay less notice, it is crucial that you follow the guidelines as set out in your contract timetable. Failure to do this could result in being paid late or having to pay the full amount applied for. Furthermore, if payments are not properly processed, recovery action can be made.
Keeping up to date records, ensuring that communication between parties is always possible, and sticking to payment terms will give you the means to get to the bottom of a potential dispute before it escalates into legal action. This could save your business a lot of time and energy, as you won’t have to divert as many resources to solve issues – all of the facts should already be at your fingertips.
Under UK law, where building contracts are made, any party involved should provide notice as soon as a breach is suspected. This helps everyone involved to reach a solution to the problem and mitigate consequences sooner rather than later.
Delay or loss and expense claims should identify as much information regarding the delay as possible. This should include dates, determine the specifics of the breach and state if there will be an effect on completion dates. Furthermore, legal entitlement clauses as part of the contract should be highlighted. At this stage, if you are receiving a notice, you should check to make sure that all of the information is relevant and factually correct.
While this is by no means a fully exhaustive list of solutions to avoid disputes, these tips should give you an idea of factors to bear in mind before issues escalate. Disputes can quickly become toxic, destroying relationships between businesses that were once healthy. Not only this, but the stakes can be high depending on the outcome of the dispute if, for example, you have to make a payment that could potentially cripple your company. With adequate planning, records and communication, you can take steps to reduce risk for your business and its reputation.