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Falling costs of construction disputes

On Behalf of | Jun 27, 2017 | Contract Disputes

Missouri builders and developers might know that construction disputes in 2016 in North America cost less than they did in 2015. This is as the time it took to resolve the disputes increased by two months.

Arcadis, an international design and consultancy company, found that the average amount at stake in 2016 construction disputes fell to $21 million. The company also determined the most frequent reasons for the disputes were omissions and mistakes in contracts, uncorroborated claims and inadequate contract administration. Public projects had the highest amount of disputes by percentage, while one-third of cases involved one or more joint ventures.

Disputes occur so regularly in the construction industry that it is imperative that a contract includes a detailed resolution process before a project can begin. The industry is moving away from conventional tactics and is embracing those that are more collaborative in nature and that may help with reducing the quantity and scope of disputes.

A significant portion of construction litigation in the United States involves construction defects. For example, in Florida in 2016, there were a large number of cases related to defects in condominiums and single-family homes involving two well-known firms. One company agreed to pay the state $23.5 million for deliberately selling properties that had building code violations. The other company was required to spend $9.6 million to repair defective doors and windows and leaky roofs.

Business owners who believe that another party has breached the terms of a signed contract should speak with an attorney who practices business and commercial law. The attorney might seek to reach an accord through negotiations if it isn’t a material breach.