What is the best way to avoid contractual disputes in construction? It is by having an airtight contract drawn up beforehand. However, if it were really this simple then disputes would never be a risk hovering around every construction project. While contracts are meant to provide a clear framework to govern a commercial transaction or relationship – including the distribution of rights, risks and obligations – disputes still happen.
Fortunately, the occurrence of a dispute does not spell the end. Challenging a dispute is your right and, with the correct guidance, can be done successfully. However, disputes are something that construction companies want to avoid. So, before I explain what to do if you ever are faced with a dispute, let me explain what you need to know to ensure you have a solid contract in place.
Choosing a Contract
There are a variety of construction contracts that can be drawn up before a project begins. Choosing the right one for your specific project is absolutely essential. The most common contracts are known as fixed-price contracts. This is because the set price has obvious benefits but simply because they are the most popular does not mean that they are the best option for every project.
You must take into consideration:
- Contract amount
- Dispute resolution
- Scope of work
- Project schedule
- Payment terms
- Warranties
While there are standards depending on which contract type you choose, ensuring that the contract meets the requirements of your project will be of great help should it ever come to a dispute.
Drafting the Contract
Contract drafting can be an intimidating process, which is why it is important to have the right legal advice and guidance from the beginning. Involving a barrister in the contract drafting process will remove much of the pressure from you. A barrister will be able to advise you on any and all formal steps, draft formal documents and provide legal support should you find yourself facing a dispute.
Resolving a Dispute
The best way to approach dealing with a dispute is to avoid one altogether. However, even with meticulous planning and expert legal advice, not all contracts go to plan. Disputes usually arise because of three very common factors; time, cost or quality. These can be further broken down into poorly drafted contracts, quality concerns or payment claims. Whatever the reason may be, construction contract disputes have the potential to cause significant disruptions and could even result in costly reworks. An airtight contract will reduce the time it takes to reach a solution.
A well-drafted contract will act as a roadmap to dispute resolution because it will provide clear reference points. So, as you can imagine, resolving a dispute becomes infinitely harder if you do not have the correct contract terms drawn up in the first place. A poorly constructed contract will then have a domino effect on your construction project and enter you into an endless round of the blame game.
Legal counsel from the beginning not only ensures an ironclad contract will be drafted but that you have what you need to resolve disputes as quickly as possible should they ever arise. Mercantile Barristers are adept at providing legal advice on the drafting and negotiation of contracts and the dispute resolution process when it comes to contract disputes.
Remember, if you are faced with a construction dispute, Mercantile Barristers will be happy to assist. Do use the enquiry form below to contact us to discuss your matter further.