How to Settle a Dispute with a Contractor

How to Settle a Dispute with a Contractor

As a construction business owner or developer, you rely on your contractors and trades to get projects complete.  Everything can grind to a halt, should a dispute arise.  There is no question – it happens all too often, between builders/developers, and contractors hired to do work for them.

Let’s take a look at how disputes like these arise, what can be done to avoid them, and what you can do, should you find yourself in a dispute with a contractor.

Avoiding Contractor Disputes

The best first step for any construction company owner, or land developer, is preventive – do everything you can upfront to minimize the potential for disputes.  This is best achieved by being really, really clear on what the expectations are.  All contracts, documents, and specifications should leave nothing open to interpretation.  Having the exact deal, in words, is the best way to eliminate the chance of something going awry during the course of a project.

Knowledge of the law is also important at this stage.  Having all your legal obligations and expectations covered in all contracts and paperwork is the best way to avoid trouble down the road.

How Disputes with Contractors Arise

There are a number of reasons why contractors will challenge you or worse, renege on a deal.  In many instances, it’s related to what we just mentioned above – ambiguity in the contract, or a misinterpretation of the specs.

Your choice of contractor can also become a problem, ask any business owner who has dealt with a bad one.  Issues can include:

  • Lack competence
  • Lack of integrity
  • Lack of honesty
  • Labour shortages

Any one of these, as well as other issues, can have a direct impact on how your project goes. Evaluate all prospective contractors thoroughly.

Settling a Dispute with a Contractor
There are several approaches you can take to settle the problem you are experiencing with a contractor.

The first thing is to go back to the contract and check to see all your expectations are in writing.  If they aren’t (or if something is ambiguous) you may have difficulty.

 

You can threaten to withhold payment.  Hopefully your contract gives you some leverage, within, for example, the payment schedule. There may also be an arbitration clause within the contract, should a dispute arise.

As a last resort, depending on the size and dollar amount of the issue, you can pursue your claim through small claims court.

When all the simplest options seem ineffective, your next step is to engage legal counsel.

Here at Stryker Slev, we can help you draft an initial contractor agreement that will cover your business should any problems arise, resolve construction defect disputes if they do come along, address delay claims, deal with mechanics liens, or go after vendors who haven’t fulfilled their obligations.  Contact us here or give us a call at 866-531-5705

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