If you own a construction business, project issues can significantly impact your bottom line, thanks to increased costs, extended schedules and decreased productivity. If another party has caused these issues, you may be able to seek legal remedies such as compensation.
These are the common reasons for legal claims to arise in the construction industry:
Disputes about change orders
If the project requires work not detailed in the original contract, parties must document the additional labor, materials, time and cost on a change order. When you do not agree to the terms of the change order and cannot reach an agreement, the dispute may require a legal resolution. This may also occur if added costs or labor arises because of field conditions that are inconsistent with the contract. Disagreements may occur about whether a specific change falls within the originally delineated scope of work.
When a project takes longer than expected and another party caused the delay, contractors can seek legal remedy. This often includes extra time to complete the project, extra financial compensation or both. If the project requires completion faster than the original contract indicates, you may be able to seek compensation for unpaid overtime and lost productivity costs. In this case, you and the project owner may disagree about who has responsibility for these costs.
Lost productivity claims
If your company saw decreased productivity because the project details varied dramatically for those in the original contract, you may be able to seek compensation for this cardinal change. You may suffer loss because of design changes, poor planning or drawing, or excessive requests for information during the project. For example, if you expect to work in a cleared field and find that it is full of foliage, someone must incur the costs of clearing the field.
Contractors can limit the need for litigation by relying on carefully constructed contracts that protect their interests. Document all changes to the project that arise after signing the contract and their impact on your work and profit.