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Litigation plays a role in almost every industry, and the commercial construction industry is definitely not an exception. Due to the number of people that are required to properly complete a project and the standard to which the work must be completed, there are entire law firms dedicated to commercial construction litigation. Construction litigation encompasses all disputes that are taken to court or require an attorney to reach an agreement or settlement. There are a couple of different instances that may lead to construction litigation.

Disputes related to nonpayment
These instances are pretty self-explanatory, but unfortunately, happen more than they should. Disputes related to nonpayment may arise when a subcontractor is not paid what they believe they should have or when a client does not pay the construction company in a timely fashion. In most instances, companies and the related parties will try to reach an agreement outside of court; however, if they cannot, both parties must appear in front of a judge for a third-party judgment.

Disputes related to construction quality
As previously stated, the majority of commercial construction projects require a lot of different moving parts and a lot of different people. While construction companies do their best to vet and interview subcontractors to ensure quality work, this system is not foolproof. There are times when a candidate that seems perfect in the vetting process starts cutting corners once on the job site. This is where a project manager comes in to help ensure all steps of the process are being properly completed throughout the project. However, if corners are being cut too often, this can cause a waste of resources in terms of time and money. Construction companies have the option to raise a dispute with a subcontractor to gain back some of the money lost in these situations.

Disputes related to mold
Similar to construction quality, sometimes the environmental factors at a job site may be perfect for mold spores and not so perfect for a clean job site. When these instances arise, they can cause complications for the project’s timeline and the client’s projects. This is a great example of times when disputes are attempted to be settled outside of the courtroom.

These disputes often take up the time and monetary resources of all parties involved. To decrease the number of times companies have to go to court over such disputes, there are a couple of ways to protect themselves. The main way is to have a detailed contract between every party included in the project including subcontractors and the client. These contracts should involve provisions pertaining to the scope of work, payments, change management processes, indemnification, and protocols for delays. Through effective contracts, amongst other efforts, Magellan Construction works hard to keep all instances of litigation to a minimum.