Wha to Do After a Construction Dispute
Disputes are all too common in the construction industry. They range from payment delays and project scope disagreements to defects, liens, or breach of contract claims. Whether you’re a general contractor, subcontractor, supplier, or property owner, knowing how to respond quickly and strategically to a construction dispute can save you time, money, and reputational damage.
Here’s a step-by-step guide to managing construction-related conflicts from a legal perspective.
1. Review the Contract
The first and most important step is to revisit the contract. Well-drafted construction contracts typically include dispute resolution provisions, payment schedules, deadlines, and scope of work. It is also very important to identify whether the applicable contract has any attorney fee shifting provisions!
Why It Matters:
Contracts form the basis of most legal arguments in construction disputes. Understanding your rights and obligations is critical before taking any further steps.
2. Document Everything
Accurate records are essential. Maintain detailed logs of communications, change orders, invoices, inspection reports, and timelines. These documents can provide crucial evidence if the matter escalates.
Pro Tip: Use digital tools or software to keep a centralized and time-stamped record of all project-related communications. We can always tell how long a contractor has been in business by their level of sophistication and organization. The more organized, the more sophisticated and more profitable (usually) the business!
3. Attempt to Resolve the Issue Informally
Before filing a lawsuit or claim, attempt a good-faith resolution. Open dialogue between parties can often resolve disputes without litigation.
Best Practices: Schedule a formal meeting, clearly present your concerns, and propose a resolution. Document the conversation with a summary email or letter.
4. Explore Mediation or Arbitration
Many construction contracts mandate alternative dispute resolution (ADR) like mediation or binding arbitration. These methods are often faster and less costly than court.
When to Use: ADR is especially effective when both parties want to preserve the business relationship or keep matters private. However, arbitration is not for everyone, or every case. You have to pay for arbitration, whereas you don’t have to pay (at least not the judge) for a case in state or federal court. This is a very strategic decision to make with your counsel.
5. File a Mechanic’s Lien (if applicable)
In Colorado and many other states, unpaid contractors and subcontractors may protect their right to payment by filing a mechanic’s lien on the property. Strict deadlines and filing procedures apply. A lien can be a very, very powerful tool. Timelines run quickly, so be sure to preserve your rights.
Important: Missing lien deadlines can result in forfeiture of payment rights. Act quickly and consult with an attorney if payment is delayed.
6. Consider Litigation as a Last Resort
If informal efforts and ADR fail, litigation may be necessary. Lawsuits in construction disputes can involve breach of contract, negligence, unjust enrichment, or other legal theories.
How Blass Law Can Assist:
Whether you’re facing a payment delay, lien issue, or breach of contract, Blass Law is here to protect your interests. Learn more about how we support contractors, subcontractors, and property owners in resolving construction-related legal challenges. Visit our Construction Law page to explore our full range of services.
The contents of this blog are not a substitute for legal counsel!
The information provided on this website does not, and is not intended to, constitute legal advice. It is for informational purposes only!
The information provided in this blog is for general informational purposes only. It may not reflect the current law in your jurisdiction!
You must obtain competent legal advice from a licensed attorney in your jurisdiction!
