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Hiding behind the contract? The owner is driving us to a dispute!!

Our experience of construction disputes on projects has taught us that some owners don’t play by the rules and are intent on hiding behind the contract. Or, at least, they like to bend the rules to suit them.

Here, I take a look at the tactics owners use that can force a contract into dispute, resulting in the contractor incurring substantial additional costs, whilst souring the relationship between contractor and owner.

I consider there to be five telltale signs that a project owner is not playing it by the book and thereby putting your project at risk.

Number 1: hiding behind the contract

Some owners will use anything within a contract to avoid paying money out, including:

• Relying on the time bar provisions contained within the contract – unscrupulous owners continually rely on the requirement to notify within a prescribed period of time, even in circumstances where their actions have caused the contractor pain and they have suffered no detriment due a lack of notice. By hiding behind the contract, where the contractor has clearly suffered additional costs, does this rarely in my experience helps resolve issues, but merely causes to the parties to entrench their positions and potentially drive them into a construction dispute.

• Exclusion clauses – relying on exclusion clauses, in particular in relation to information provided by the owner. We have worked on numerous disputes where a client has provided information at the tender stage, that has been relied upon by the contractor and the owner has relied heavily on the exclusion clauses, once this information has found to be flawed or inadequate.

• Contract interpretation – owners continually rely on “inventive” or basically flawed interpretations of the contract to support positions that they wish to adopt.

In the final part in this series of blogs, I’ll explain what you can do if this does occur.

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Kenzie Claims Assistant