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Why do contract disputes happen?

Contract disputes can derail a construction project and leave you scrambling for solutions. When you set clear expectations and prioritize communication, you can more successfully prevent discord.

Knowing why contract disputes happen in the first place may give you the tools to mitigate tension before it threatens your project’s success.

Breach of contract

Your contract should clearly disclose each party’s responsibilities, rights and expectations. There should also be guidelines for desired outputs and consequences for non-compliant behavior. Anytime someone does something contrary to the agreement, you can claim breach of contract. Some examples include missed deadlines, late payments and unfinished work.

When you clearly articulate your expectations, your contract can function as a set of instructions. You can encourage contract participants to reference the document as they proceed with their duties. According to Inc., money issues are one of the more common reasons for a breach of contract. Disclosing everyone’s financial obligations in writing may help to prevent disagreements over payment.

Gross negligence

Another common reason for construction contract disputes is due to gross negligence. In construction, the companies you contract with must perform at a superior standard. Concerns about meeting building code requirements and passing inspections should take priority. As such, the workers you contract must meet industry standards when performing their obligations.

If at any point during a contractual agreement, you notice subpar work, ignorance of expectations or disregard for industry requirements, you can claim gross negligence. Establishing a realistic timeline for the project and frequently observing the project’s progress can help you identify questionable behavior before it causes long-term damage.