Are your dispute clauses putting construction projects at risk?

On Behalf of | Jan 30, 2025 | Construction Contracts |

Disputes – from payment issues to work stoppages – can damage any construction project. While you can’t prevent every dispute, a strong resolution clause protects your interests. When drafting your contracts, there are three things you need to keep in mind.

Time is one of your most valuable assets

Clear timelines in your dispute resolution clause can save your project. Vague deadlines may turn simple issues into long battles that drain your resources. To avoid having your crew and equipment sitting idle while disputes go on, consider including the following details:

  • When to report issues: Set specific deadlines for reporting issues to prevent delayed claims.
  • How long parties have to respond: Clear response times keep the process moving and hold everyone accountable.
  • When to start resolution steps: Define when mediation or other resolution methods must begin.

These timeline requirements create a structured approach that keeps your project on track and minimizes costly delays.

Construction projects involve many players

Your dispute resolution clause may need to account for construction disputes between various parties. This can include other contractors, subcontractors, suppliers and owners. It’s important to address issues such as:

  • Communication plan: Set up steps for sharing notices. List who reports to whom. Name who can make key decisions.
  • Record keeping: List which records teams must keep, including daily logs, photos and project updates.
  • Site visits: Set rules for work inspections and technical reviews.

A well-organized multi-party dispute process helps prevent confusion and speeds up resolution.

Ensure that work keeps moving

Your project can’t stop for every dispute. Make sure your clause explains:

  • How work continues: Define which activities can proceed during disputes.
  • Who can access the site: Set rules for site visits and inspections during disputes.
  • Payment handling: Establish how payments for undisputed work will continue.

These provisions can help maintain project momentum while resolving disputes effectively.

Protect your business

A strong dispute resolution clause can save your project from costly delays and expensive battles. Have an attorney review your clauses before you sign. This small step can prevent major issues in the future.

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