Construction Contract Disputes
However carefully the contract is drafted, nothing can prevent problems and construction projects can run into trouble for a variety of reasons.
Identifying the problems early and taking appropriate, decisive action can often resolve or contain the problem. It can also reduce losses and contain costs.
Typical issues which can cause dispute upon which we can give commercial legal advice are:
Delay and Disruption
Most contracts have a fixed completion date and often progress milestones against which payments are made. Delays often occur and an analysis of the causes of delay and assessment and claim for extensions of time is often critical to identify a recovery of extra time and/or cost on the project. The factors leading to delay are often complex and a proper and detailed analysis is essential in safeguarding your rights to either ensure an increased recovery of the cost or resist a financial claim for delayed completion.
Critical path analysis, commercial scheduling of works programmes, identifying the relevant events and their causes and analysing the cause and effect of operational factors in delay and disruption claims are key to a successful outcome. These issues are specialist and complex and you need advisers experienced and comfortable in being able to robustly represent your position.
The guidance of the Supreme Court decision in Arnold -v- Brittan is the most recent statement on the principles relevant to issues of contractual interpretation.
Most construction contracts have a defined scope of work that may change as the contract proceeds. The contract may provide for the proper recording, approval and valuing of variations. Where variations are not properly recorded under the contract payment might not be triggered. What are recoverable variations under the contract? What works fall within the original scope and what works are variations? How are they documented for payment to ensure full recovery or to effectively resist unnecessary or unapproved variations for which no extra payment is due?
If you are seeking recovery of payment for additional works or resist liability for construction contract variations a proper analysis of claims is key. Preparation and analysis of Scott Schedules setting out heads of claim as well as drafting supporting documents or rejection of variation claims are key to commercial success.
Advice at an early stage of the appropriate contractual procedures to make or resist a variation claim is fundamental to avoid undertaking substantial works as a subcontractor for which you have no entitlement to be paid (nobody likes working for nothing) or being liable for payment of substantial additional cost which is not budgeted which could threaten the profitability of the project.
Experience and expert help at the early stages can prevent extensive and expensive problems arising. Our construction solicitors in Bournemouth have extensive experience in all variation claims and industry standard contracts.
Loss and Expense Claims
The scope of the works under construction contracts can change to a greater or lesser extent before completion. Some changes hardly affect the project while others fundamentally alter the nature and scope of the works and the cost. Additional instructions, changes in work methods causing added cost or complexity or changes in working hours or site conditions can all cause a claim for payment as well as, at the same time, claims for an extension of time.
The key to maximise any financial recovery or to be granted the appropriate extension of time is to take expert advice on the contractual procedures to document and claim at the appropriate time. The contract may well specify the type of claims that fall within delay and disruption or identify key or relevant events that upon proper notice can trigger valid claims for payment. A failure to notify a claim in accordance with the contract mechanism can cause a loss of your rights to recover.
Many contractors delay seeking advice and fail to trigger the contractual entitlements to financial recovery or extensions of time and wait until the end of the contract before trying to do so. Waiting to deal with issues until the contract is virtually complete is often a scenario we see when the parties have been working hard to accelerate to Practical Completion and meet the deadlines without considering the contractual mechanism for the recovery of cost or time. The failure to follow the contract may be fatal to recovery and cooperation between the parties cannot always be relied upon when the project is finished.
Making sure the right contractual notice is served at the right time and the right approval is obtained under the contract is critical to ensure either that you are able to recover additional cost to which you are entitled, or alternatively you are given extra time in order to have complete the contract and thereby avoid time delay costs or claims.
Our construction solicitors have experience to guide you through the contractual issues to maximise financial recovery or resist any claims for additional time or cost.
Contact our construction solicitors
If you would like to discuss further with our specialist construction contract solicitors please contact us or call 01202 294566.