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Supply chain struggles could translate to legal disputes

On Behalf of | Aug 11, 2021 | Construction Litigation

The pandemic has taken a toll on many industries and construction is no exception. Supply shortages, increased demand and skyrocketing material prices have combined to create a legal powder-keg affecting everyone from contractors to developers and individual homeowners.

The cost of construction delays

Construction delays are one of the most common reasons for lawsuits between contractors, owners and other parties operating in the construction industry. Supply chain breakdowns, material shortages, social distancing protocols on construction sites and other factors have resulted in significant delays in the recent past, halting progress on projects from residential homes to major commercial projects.

Litigation involving these delays is fact-dependent. Was the delay caused by pandemic-related reasons out of the defendant’s control or were other factors at play? Counsel on both sides of these disputes must be well-versed in these factors and ready to weigh them against more traditional reasons that cause interruptions in construction projects.

More expensive than expected

Forty percent of respondents to a recent survey of builders said they were impacted by significant price increases due to the pandemic. Parties who were promised a certain price range will want to carefully scrutinize the reasons behind the price hikes to determine if they are legitimate. If a price increase seems out of proportion with actual inflation in material costs, claims against builders, contractors and material suppliers may ensue.

No end in sight

While signs have emerged that material prices are stabilizing, construction professionals will continue to operate in an unpredictable financial and legal environment for the foreseeable future. Professionals in this industry must seek out legal counsel that not only is knowledgeable in the unique laws that apply to this area of commerce, but also keeps abreast of external developments that affect the legal landscape.