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Common Contract Disputes in Construction Litigation

On behalf of Cohn Lifland Pearlman Herrmann & Knopf LLP | Feb 26, 2019 |

Disputes involving construction projects can be complex. These disputes often arise between a property owner and a contractor, but can also involve subcontractors, property managers, construction managers and even licensed professionals like architects and engineers.

Several factors contribute to disputes arising from construction projects. The most common disputes result from construction defects, project delays and late payments.

Construction defects

Construction defects are one of the most common reasons for construction litigation. These occur when the workmanship, design or materials used are considered substandard or “defective.” Such defects can include structural flaws, use of substandard materials or finishes, and work that simply looks poor. It is common for disputes to arise involving defects because parties can differ on what they consider “defective.” 

Project Delays

Progress disputes commonly occur when a contractor or construction manager fails to deliver work or materials in a timely fashion. Progress disputes can be complex, because the parties may not agree on who caused the delay, or even if the delay was within the control of any party. Any participant in a construction project should closely track project progress, and frequent communication on the project timeline can help avoid disputes that might further delay your project.

Late payments

Construction liens (formerly called “mechanic’s liens“) serve two primary purposes: 1) they help protect parties that provide labor, materials or equipment in order to ensure that they get paid for their products or services that are used on the project, and 2) they provide an orderly and time-sensitive system so property owners are aware of any and all open invoices on their project and can address them in an orderly fashion. Generally, they are used by contractors, subcontractors or material suppliers against a property owner who (either on their own or through a general contractor or construction manager) has failed to make a payment. 

Once a lien is placed on a property, the owner will have difficulty selling or borrowing against the property without paying the debt. Additionally, the party who filed the lien may be able to foreclose on the property if the owner still refuses to make a payment. This can be upsetting for owners who are not satisfied with the work on a construction project, but they may have statutory defenses that allow them to remove liens from their property.

Construction litigation matters can be extremely complicated. It can be beneficial to consult with an experienced construction litigation attorney to discuss your options.