When you agree to take on a project, you expect to do the work and get paid. There’s satisfaction in a job well done, but it doesn’t put the food on your table. The money does that.
But nearly every contractor has run into disputes that threaten their payments. In fact, experts have found that someone files a claim in roughly one-quarter of all construction projects. Somewhere between 10 and 30 percent of all projects run into serious claims. It’s worth knowing what to watch for and how to protect yourself.
It pays to understand your contract
A consulting firm recently reviewed the leading causes of construction disputes. They found three primary culprits:
- Parties failed to understand and comply with their contractual obligations.
- The contract failed to account for all the work needed.
- Someone failed to administer the contract with proper documentation.
As a contractor or subcontractor, this means you want to make sure you know what you’re getting into before you sign. You want a perfect understanding of your obligations, and you want to understand the other party’s obligations, as well. They should all be spelled out clearly. You want a clear idea of how both sides will deal with the inevitable changes and uncontrollable delays. And you want to know which checkpoints you’ll mark off as you manage your part of the project.
What to do with an imperfect contract
You may be able to save yourself from some headaches by reviewing each contract carefully. However, the chances are you’ll still find yourself in an unforeseen dispute sooner or later. Especially in larger projects with multiple subcontractors, you may find your work delayed. Or another party’s poor work may tank your budget.
When someone else’s failure cuts into your profits or forces you into a situation where you can’t do your job properly, you may need help defending your interests. This may be the case if you run into issues like:
- Another party’s defective work or products
- Poor site conditions
- Delays outside your control
As soon as you run into any such snag, it may be a good idea to seek representation. It’s likely the other side won’t see things the same way you do, so you want to make your case clearly and effectively. And that often means starting from a solid legal understanding of your contractual obligations.
Protect your interests
Construction work can be complex. Larger projects often involve multiple subcontractors, each of whom is responsible for one piece of the larger whole. Even if your contract looks clean, another party’s dispute may ripple down and throw everything into disarray.
You may be able to avoid some disputes by making sure your contract allows reasonable accommodations for changes and unexpected delays. But you may not escape every dispute. When you find your back to the wall, you can’t give up on the money you deserve. You can’t starve your business. You want to make your case, get paid and put food on your table.