Construction disputes are common in the construction industry, but they don’t have to be. In fact, there are many proactive measures contractors can employ to prevent them from occurring and to quickly resolve them if they do happen. This article discusses some of the most common causes of disputes in construction projects, including differing site conditions, change orders and differing scope of work. Read on to learn more about how to avoid these issues and find solutions whenever a dispute does arise.
Differing Site Conditions
The most common cause of construction disputes is differing site conditions. This means that, while the general contract drawings and specifications have been agreed upon by both parties, the actual conditions at the jobsite are different from what was expected. For example, the soil may be different than was reported on the drawings, or there may be underground utility lines that weren’t marked up. Contractors can usually address these issues by conducting a soil investigation at the jobsite to determine what the conditions are like, as well as by marking up the drawings properly. If these issues are not resolved, however, they can lead to additional costs or delays.
Change Orders
Another common cause of construction disputes is the issuing of change orders. Change orders occur when there is a difference between the original contract documents and the actual project scope. They’re commonly used when the project scope is changed due to unforeseen conditions at the jobsite (i.e. site conditions are different than what was originally expected). A change order typically outlines the nature of the change, the cost of the change, and how the contractor is compensated for the change.
Differing Scope of Work
Differing scope of work is another common cause of construction disputes. This occurs when there is a difference between the actual project scope and the project scope as outlined in the contract documents. Differing scope of work usually happens when the owner, architect, or engineer overlooks or doesn’t take into account important factors that will affect the cost and/or the timeline of the project. For example, the architect may not take into account the different types of materials used in the project, or the materials may be more expensive than the contractor anticipated. This can lead to additional costs and delays in the project.
Time/Cost Overruns and Deficiencies
Time and cost overruns are common on large and complex construction projects. These occur when there is an increase in the total cost of the project or an increase in the project’s timeline due to unforeseen circumstances. For example, if the project scope is larger than originally planned, there may be a higher labor and material cost. If the project timeline is extended due to a change in weather or site conditions, there may be an increase in the overall project cost. Unforeseen circumstances like these can lead to time and cost overruns.
Profit/Loss Analysis
Another common cause of construction disputes is a profit/loss analysis. This occurs when there is a discrepancy between the construction costs and the contractor’s profit margin. While there are many factors that can affect the amount of profit that a contractor can earn, it’s important to keep the project’s budget in mind. This will help you and your contractor to stay on track and avoid incurring unnecessary costs.
Conclusion
Construction disputes are common in the construction industry, but they don’t have to be. In fact, there are many proactive measures contractors can employ to prevent them from occurring and to quickly resolve them if they do happen. This article discusses some of the most common causes of construction disputes, including differing site conditions, change orders and differing scope of work. Read on to learn more about how to avoid these issues and find solutions whenever a dispute does arise.