What are some common ways to resolve construction disputes?

Many business owners of different-sized organizations in the San Diego area will have to engage in a construction project as part of their business plan.

Whether the organization needs to build a new facility or improve on existing commercial property, a business has every right to expect that these projects will get done timely, correctly and within budget.

When a contractor disappoints these expectations, a business can suffer significant financial and other losses.

Despite a business’s best due diligence when choosing a contractor and negotiating a construction contract, construction disputes can still arise for any number of reasons.

Oftentimes, these disputes arise because one side or the other disagrees on the interpretation of the construction contract or has simply not properly planned how to meet that side’s obligations.

Resolving a construction dispute does not always have to involve litigation

Sometimes, the best way to handle a construction dispute is for a business to sue a contractor or other party involved in order to protect that business’s interests.

While well-prepared strategic lawsuits are the best option in some circumstances, most Southern California business leaders realize that, like other litigation, construction litigation costs resources and always carries some uncertainty with it.

In many cases, it may make sense to pursue alternative dispute resolution, like informal negotiation or mediation. Submitting to binding arbitration or another informal decision-making process are other ways to save resources and reduce risk.

There is also a common practice for a contractor to have a surety bond in place through a bank or insurance company.

The bank or insurance company that issued the surety bond promises to step in and pay damages or remedy a construction problem if the contractor is unable or unwilling to do so.  A business may be well-served by filing a claim against a bond.

Before deciding which remedy is best, the business should review its contract and evaluate all possible legal options carefully.