How to Protect Your Construction Company from Legal Disputes

In the construction business, even the best-planned projects can experience roadblocks and downturns that eventually translate into an expensive lawsuit. Schedule delays, budget overruns, defective materials claims, and incompatible expectations all have the potential to create a situation that ends up in court.

While there is no way to guarantee that your construction company won’t ever be sued, you can minimize the risk by taking preventative measures like those below:

  1. Negotiating Your Contract

If you notice restrictive or unfavorable terms in a contract, negotiate them and request changes before signing. Below are some recommendations and guidelines to keep in mind:

  • Be very wary of language that could be interpreted in more than one way.
  • Make sure that there is a provision specifying how change orders are issued and approved.
  • With damages for delay clauses, negotiate limitations on enforcement, such as when delays are caused by the other party or circumstances beyond reasonable control, such as weather.
  • If you are a subcontractor and notice a clause that makes your payment conditional on when the owner pays the contractor, negotiate its removal.

Addressing problems at the contract signing stage will lessen the chance of them causing issues later on. If the other party refuses to make any changes to restrictive terms, you might want to rethink the feasibility of taking on the project.

  1. Communicating Problems Promptly

If issues arise during construction, notify other parties immediately and in writing, even if you think everyone is already aware of the situation. If litigation does become necessary, proper documentation can confirm and protect your company’s position.

  1. Addressing Misconceptions Immediately

If you notice any records or documentation that cast your work on the project in an unfavorable light, respond in writing immediately. This is especially urgent if you are unfairly being blamed for a delay or someone has alleged that you performed defective work. Ignoring these allegations as petty and ignorant (which they very well may be) is not the best course of action.

  1. Following All Dispute Resolution Procedures and Deadlines

If a situation does arise, make sure that you comply with all applicable claim and dispute resolution procedures. Even if there are efforts being made to resolve the matter or settlement discussions are in progress, keep following the contract’s terms and using approved channels for claims processes. These terms remain in effect regardless of the outcome.

  1. Contacting a Construction Law Attorney

Disputes can often be resolved and even avoided if addressed during the early stages. Having experienced legal counsel can prevent comparatively minor issues from developing into larger problems.

As the owner of a construction company, you work hard and want to protect the business you’ve built, but it’s been said that one-third of all construction contracts end in dispute. If you find your company in such a situation, don’t wait to obtain the legal assistance you need. The experienced construction law attorneys at Rosen Law will advise you on complex contracts, provide liability defense when needed, and ensure that your rights are protected throughout the duration of every project you undertake.

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Rosen Law LLC

Our attorneys, admitted to practice law in New York, Florida, New Jersey, Connecticut, Pennsylvania, and Georgia, practice within a wide range of legal areas including business and real estate litigation, Fair Labor Standards Act litigation, complex real estate transactions, preparation of condominium offering plans, business sale and purchase transactions, construction law and litigation, New York City tax abatements, estate planning, probate and probate litigation and much more.