Construction disputes: What you need to know

Digital Construction, Project Management

Putting together a successful construction project is most of the times a very tough and demanding procedure. A number of construction disputes may emerge if some of its stages haven’t been planned or properly executed. For that reason, it’s essential that there’s crystal clear communication between the different involved parties.

On top of that, the existence of a carefully elaborated plan, regarding the ways in which a potential dispute can be avoided -or at least resolved-, is always highly advisable.

In that way, it will be easier for those who actively work on the project to complete the project and make the newly built structures available to the market. At this point, it would be useful to offer some more information about construction disputes and their true importance.

The description of a construction dispute

A construction dispute can be the outcome of various factors. Delays in the project, failure of compliance with the pre-set project standards and exceeding cost can be some very good reasons for a project dispute to arise. The lack of precision in the contract description can be the source of this problem.

When a disagreement like the ones above appears, this has a serious impact on the whole life-cycle of a project. For the project to be able to proceed, every single dispute has to be resolved. Otherwise, there’s a danger that every process and task around the project will freeze.

An “on-hold” situation can lead a project to start bleeding money due to the serious delays. In order to solve these disputes, it’s imperative that you first detect the causes behind them. Only then, you can proceed with finding a solid solution that can save your project.

Reasons behind a construction dispute

There are many different parameters and details for consideration behind every construction project. The following are some of the most common issues that may pop up during a construction project:

Contract disputes

The reasons for a contract dispute may vary each time. Disputes over insurance agreements can be, for example, one of those reasons. One of the project parties may feel that it’s entitled to some compensation while the insurance company, or whoever is responsible for that may have a different opinion.

Another example of contract dispute could be a disagreement that emerges regarding the scope of work of each party. In simple words, the one side may think that some of the assigned tasks aren’t part of its responsibilities and start demanding a higher payment for completing them.

It’s clear that both situations above are eventually coming down to one thing. Lack of precision when putting together the contract. That’s why, it’s truly vital to pay extra attention to define the obligations and the rights of anyone involved in the project. A well-written contract can save you and your project from a lot of fuss.

High conflict people

A construction project team normally is consisted of a vast amount of people with different mentalities and ways of reacting under pressure. In the long run, this can be a problem in cases where people of high temper or simply people who have a totally different vision for the outcome of the project start putting obstacles in the project’s life cycle.

For that reason, chemistry is key when putting together a construction project team. A precise description of each individual’s rights and responsibilities on the contract is the best way to deal with such people.

Check out also: Map of the biggest construction companies in the US

Unforeseen reasons

A construction project can sometimes be full of surprises. Severe accidents or extreme weather conditions are unpredictable factors that may impede the proper progress of a project. To prevent such construction disputes, it’s important to have analyzed all the potential risk factors in advance.

Strike action

This factor could be part of the prior category. But the main difference in this case is that it’s something that could easily be prevented if there are no problems with late payments or unsafe site conditions. In a nutshell, the more professional you are during the conduction of the project the smaller the danger for such kind of actions.

Construction Dispute Resolution


Analyzing the reasons behind a construction dispute is one thing. But being able to resolve them is another. Here are some of the ways in which parties involved in a construction project choose to solve their disputes:

Putting together a dispute resolution board

A straightforward way of resolving a dispute is the establishment of a dispute resolution board. The board normally consists of three members. The disputing parties are appointing the first two (every side chooses one) and are people with high technical knowledge.

In that way, they will be able to offer responses in complicated technical issues. The two board members in an effort to achieve the higher level of objectivity possible, they choose the third board member which is most of the times the supervisor of the whole process.

Hiring a mediator

The choice of a mediator can also be a common practice when trying to resolve a construction dispute. As a rule, a mediator is a neutral person who is assigned to offer some suggestions and potential solutions to an arising dispute after having come in contact with both parties. The judgments made by a mediator aren’t binding.

A mediator can be a valuable addition to any construction project even when no dispute is in progress. In that way, s/he can constantly monitor the progress of the project and provide valuable feedback in order to make sure that everything goes as planned.

Find also: The Future of Construction – BIM

Construction arbitration

Construction arbitration is another method of dispute resolution. In recent years, it tends to be considered as part of the mediation progress that we already described. The main difference, in this case, is that the arbitrator has the power to come up with a solution that has legal binding power.

Judicial appraisal

A judicial appraisal is also a smart way in which you can find a solution to a potential dispute. It could be described as a trial stimulation. In this case, a judge is asked to make an estimation of the outcome of the trial if the dispute reaches to the court. His/her judgment is the outcome of the details that the parties in dispute have presented.

How to prevent a construction dispute

Prevention is always better than cure. Before you start working on a new construction project, you want to be certain that you have taken all the necessary measures in order to minimize the emergence of any project disputes. Below we offer some advice which can help you save a lot of time and money by avoiding unnecessary conflicts:

Elaborate a detailed construction project plan

A detailed plan is the core of your project. Make sure that you start your effort by analyzing every detail of the project and by elaborating a risk management plan. This will offer you the ability to predict any mistakes along the way and to define your project’s’ needs. The latter would be of tremendous importance when you try to put your team together. The better the team you build the fewer chances for a dispute to arise.

Use construction software

Construction software can offer significant help in preventing disputes between project parties. A top-performing construction software allows you to keep track of every single detail around your project. In that sense, everything is recorded. A dispute can easily be resolved given the fact that all the data of the project are available. Moreover, this clear way of keeping a detailed record of the project’s progress allows for the prediction and prevention of any potential conflicts.

Keep a site diary

A solid construction software can be your eyes and ears in a project. However, you always want to be sure that you keep a personal record of what takes place on the site. By keeping a site diary, you can be confident that all the important issues around a project are addressed and that mistakes are detected on time. For that reason, try to record everything you see and ideally keep a photo archive, as well.

Hold meetings with the other parties regularly

Establishing good communication with the other project parties is crucial. In that manner, you have the opportunity to discuss any potential disagreements before they get too serious. On top of that, by meeting regularly with the other project members you minimize the possibility of mistakes and maximize the project management efficiency.


Designing and eventually conducting a construction project is tough. Preventing or resolving construction disputes is even more challenging. It’s understandable, then, that there’s a strong need for an exhaustively elaborated plan in order for your project to be successful. A plan that will be a valuable tool in your effort to predict and manage risk and conflicts around a project.

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