For construction companies, the cost of parts and materials has been going up for a long time. Inflation is always slowly increasing these costs. There can also be supply issues that lead to a short-term increase when a specific material is more difficult to find than usual.
In addition, there is concern that recent tariffs are going to drive prices up more. If companies have to pay additional taxes just to import these materials, they then raise the price of the materials and pass that cost on to the consumer. Ultimately, the person who is funding the construction project has to pay the base cost along with the tariff. This is in addition to standard inflation.
Why would this lead to a dispute?
This can cause some disputes, especially on long-term projects. Say that a major construction project is going to take three years. The quote that the construction company gave three years ago may no longer cover all of the costs that they are facing. If the cost of materials doubles in the middle of the project, what does that mean for the end cost that’s being passed on to the consumer?
Naturally, consumers may be unhappy to find that they’re going to have to pay far more than they were originally quoted if they want the job to be finished. But at the same time, the construction company can’t operate at a loss, so they may have to raise prices just to cover the shifting costs of these materials.
It’s important to have resolutions during these disputes, especially for major projects where there can be hundreds of thousands of dollars on the line. Those who are involved need to be aware of all their legal options.
