Own A Construction Company? What To Add To Your Contracts To Avoid Construction Litigation

Posted on: 6 June 2023

When you work in construction, disputes will arise from time to time. Without the right steps, disputes can end up in litigation. Unfortunately, litigation can be costly for your company. That's why you need to work hard to avoid litigation. There are steps you can take to resolve construction disputes before they head to court. One way is to include dispute resolution in your contracts. There are several dispute resolution tactics to include in every construction contract. If you're not sure how to address construction disputes in your contracts, read the list below. Here are four methods you can use to resolve construction disputes. That way, they don't turn into litigation issues. 

Negotiate the Dispute

If your construction contracts don't include negotiation methods, talk to an attorney. Negotiation is an effective tool when it comes to resolving construction disputes. Including negotiations in your construction contracts ensures that you and the other party will work together to resolve the dispute. 

Mediate the Dispute

If negotiations fail, you don't want to head right into litigation. To avoid that jump, include mediation in your construction contracts. Mediation takes negotiations to the next level. With mediation, you'll work with a third-party individual. The mediator will help you and the other party work through the issues that are causing the dispute. One of the benefits of a mediator is that the third-party mediator is neutral to the dispute. That means they can help both parties work through the issues. 

Adjudicate the Dispute

There are times when negotiations and mediation fail to give you the results you want. That doesn't mean you need to move on to litigation. That's especially true if you've included adjudication in your construction contract. Adjudication is an effective way to resolve construction disputes before they reach the level of litigation. Unlike negotiations and mediation, adjudication offers a decision. If you or the other party won't agree to the decision, the court can enforce it. That way, you avoid the cost of litigation.  

Arbitrate the Dispute

You may encounter disputes where other attempts at dispute resolution fail. For those situations, there's still a chance for resolution without litigation. Make sure you have that option. Talk to your attorney about including arbitration in your construction contracts. Arbitration includes a neutral third-party person. But, arbitration can result in a legally-binding resolution. That way, you get a legally-binding resolution to your construction dispute and you avoid the cost of courtroom litigation.

For more information on construction litigation, contact a professional near you.