Construction Dispute

The construction industry is a complex and competitive environment in which participants with different views, talents and levels of knowledge of the construction process work together. In this complex environment, participants from various professions, each has its own goals and each expects to make the most of its own benefits. In the construction industry, since differences in perceptions among the participants of the projects, conflicts are inevitable. If conflicts are not well managed, they quickly turn into disputes.

Construction disputes arise as a result of disagreements between the parties involved in a contract. These disputes themselves are not a breach of contract, but they may lead to a breach of contract, termination, or even claims threatening the contractor’s surety bonds if unmitigated. Parties in a contract, therefore, need to take the necessary steps to reduce the possibility of disputes arising for parties in a contract.

Disputes frequently occur if project work doesn’t meet expectations or when there are costs and delays that are unaccounted for in the project estimate. In many cases, a problem that could have been easily resolved turns disastrous because of incomplete or missing documentation.

Since contracts do not cover every eventuality, problems may arise in areas where the contract remains silent. When such disputes arise, parties may want to gain as much as possible from each other. Equally, the parties may have different perceptions of the facts surrounding the contract. One party may have unrealistic expectations, thus affecting the ability to reach amicable agreements. Also, a party may refuse to perform their contractual duties in a bid to avoid liability.

When there is a high level of uncertainty, the stakeholders cannot plan for every project detail before work commences. With such a high level of uncertainty, project details and specifications may change, leading to disputes.

Common types of construction disputes

1. Confusion over scope of work
2. Changes to original scope of work
3. Variations
4. Not providing site possession
5. Site conditions and unforeseen changes
6. Delays
7. Errors in Drawing and Design data
8. Quality of materials and works
9. Unclear payment terms
10. Inadequate / Incomplete specifications
11. Different interpretations of the contract provisions and Ambiguities in contract documents
12. Lack of communication and lack of team spirit

We will discuss about the Dispute Resolution procedure in next blogs. Thank you for visiting my site.

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