There is a lot that goes into the construction of a residential or commercial project. There are numerous steps, such as bidding for the project, obtaining permits and negotiating contracts, and there are many parties involved in the process. All of this can lead to disputes among owners, contractors and more.
According to FindLaw, there are many reasons for construction disputes, but there are some that occur more often than others. Some disagreements happen in relation to the scope of work. This may occur between a subcontractor and contractor or be about the specifications or interpretation of work plans. Disputes also happen due to subcontractor substitution.
One of the most common reasons for legal action in the construction industry is the area of defects. This includes negligence, breach of contract, liability or breach of warranty. If the end project is not up to the standards agreed upon by both sides, this falls under breach of contract or breach of warranty. Negligence occurs when an injury occurs because the contractor or subcontractor did not follow standards of care. With strict liability, the contractor is liable for any defect no matter who was in the wrong.
If a dispute does arise, Harvard Law School outlines the different ways to resolve it. In mediation, the two parties come up with a solution themselves with the help of a third party. In arbitration, there is also a third party, but he or she is the one who decides a solution based on arguments from both sides. Litigation is a common way to resolve a construction dispute. The two parties state their cases to a jury and/or a judge, who make the ruling. Instead of a court hearing, the conflicting parties may decide on a settlement agreement.