Disputes are common occurrence in any Louisiana construction project. These disagreements can lead to increased costs, late performance under the contract and even expensive litigation. When a dispute arises, parties typically turn to the contract for guidance on a possible resolution, but often a resolution of these disputes requires third-party neutral, mediation, arbitration, and/or court. So what are parties in construction projects mainly fighting over?
A recent report from global construction consultants Arcadis examined the top five disputes that come up in construction projects around the United States and the globe. The report defines “dispute” as a situation where two parties disagree about rights under the contract, requiring a decision governed by the contract, which then leads to a formal dispute.
The top five construction disputes in the 2015 report included:
- Errors and omissions in the contract – when a mistake is made on a construction project the parties will often disagree what constitutes the standard of care and performance under the contract.
- Differing site conditions – generally this comes into play when either (a) the conditions at the construction site differ from those indicated in the contract or (b) the conditions at the construction site are materially different from those normally encountered in similar construction projects. Here in Louisiana we deal with treacherous site conditions due to the unpredictable rain.
- Failure to understand contract obligations – This can be on the part of the employer, contractor or subcontractor, and can often be avoided with attorney review of the contract. The is where ambiguity can play an important role and attorneys help to prevent ambiguous contract terms.
- Failure to properly administer the contract – In Louisiana you should file a notice of contract with the mortgage office in the parish where the work will be done. While this is typically only required for public projects or bonded work it is a good practice for all construction contracts that avoid headaches later on. This practice also puts all third parties on notice that there is a contract.
- Poorly drafted or incomplete and unsubstantiated claims – Contracts that are written from a form or not reviewed by an attorney often have ambiguous, conflicting or confusing clauses that give rise to contract claims. Again, these can be avoided by having an attorney review your contract for each project.
The Smiley Law Group is experienced in resolving disputes between contractors, subcontractors, architects and owners, both in court and through alternative dispute resolution, such as mediation or arbitration. Contact the Smiley Law Group for a free consultation today.