In days gone by, a handshake was often enough to set a construction project in motion. However, times change. Today, everything must be in writing; otherwise, legal issues may result.
From the scope of work to project completion, construction contracts are essential, and the wording is critical to avoid legal missteps.
Issues with change orders
Among the most common disputes in the construction business is the issue of change orders: the necessary work and how much it costs. Here, documentation becomes vital. Before work can commence, a legally binding document must describe the change to the original agreement that the property owner requests. The wording, as in all construction contracts, must be plain and clear so that everyone involved understands and there is no room for misinterpretation.
An example of a subcontractor caught up in a contract dispute is an electrical contractor. He or she may be sidelined, at least temporarily, because of a dispute between the property owner and the general contractor. The disagreement may involve change orders or some other problem, but without a well-written legal agreement, work may have to stop until the parties resolve the issue. The electrical contractor cannot go directly to the property owner for clarification or further orders but instead must wait and take direction from the general contractor.
There is a wide variety of reasons for construction disputes, everything from a misunderstanding about site conditions and construction defects to material substitutions. Miscommunication is often a major issue. Again, these problems can only become more convoluted and intense in the absence of proper documentation.
There is room for error on many fronts in a construction project. The stakes are high not only financially speaking, but also with respect to the reputation of the company or contractor responsible for getting the job done right. Words matter. To avoid legal entanglements, well-written construction contracts are essential to the success of any project.