Main Triggers for Disputes in the Construction Sector
Several large projects in the construction sector face disputes that often lead to personal conflicts and additional costs that should ideally be avoided whenever possible. Not only do they give rise to major delays in the business but they also add to the pile of costs unnecessarily. This is where professionals like Contract Square come in to sort out the major disputes in the construction sector.
- Flawed documentation: This one’s arguably the most common reason for major disputes. Discrepancies in contracts such as omissions, misinformation, etc. lead to further confusion. These errors could be as simple as problems related to ground and soil characteristics or a difference in the price of raw materials. Likewise, bad management of the different variations of documents may also lead to disputes between the involved parties.
- Scale change: The scope of a construction project can change over time. While some might want to expand it midway through, other parties may want to reduce the scale of it to save cost. Such disagreements also cause dissent and hamper the flow of construction.
- Compliance failure: Several people are involved in a single construction project. It is crucial for all those subcontractors, contractors, and owners to be on the same page to avoid disagreements. This means all parties involved must comply with the terms of the contracts from start to finish. If there are many people involved in the same project, it becomes rather difficult to coordinate these agreements which further leads to disputes.
- Additional costs: Bureaucratic formalities and other processes that require back and forth visits to regulatory authorities do bring out additional costs in the business. Aside from the economic dent they cause, these formalities also create some delays which is a likely reason for disputes.
- Errors by the owner: The owner has a lineup of responsibilities on their hands that need to be fulfilled in time. Actions like failure to supply materials on time or delaying payments not only makes the entire process of construction behind schedule but can also lead to havoc and disagreements throughout the chain of command. The owner is also responsible for fulfilling claims that may arise due to losses. In several cases, the intention to not do so causes major disputes between stakeholders, owners, and others involved.
- Delay in site handover.
- Delay in issue of engineering drawings.
- Delay in supply of resources- material, equipment, and services.
- Delay in decision making.
- Delay in acquiring permits & approvals.
- Delay in payment of bills & advances.
- Delay due to a change in the scope of the project.
- Delay due to a change in plans /design of the project.
- Delay due to subcontractor/ vendor/another agency.
