6 Steps to Protect Yourself from Construction Disputes

In 2023, a PlanRadar survey revealed that 80% of construction companies face disputes on their job sites. Due to a lack of communication, four out of five contractors are wary of their subcontractors (source). This alarming trend has remained consistent over the past few years. In 2017, 64% of construction projects encountered a single type of dispute, while 36% faced multiple disputes (source). These conflicts among professionals inevitably have negative consequences on the finances, quality, and reliability of the projects. What are the most effective preventive measures for avoiding construction disputes?

A construction dispute arises when you have disagreements or disputes with your client or your employees. The most common causes are detailed in the report by theNational Association of Consumers and Users (CLCV) from 2017 (source): 

• The defects such as cracks or non-compliance with standards (43%).
• The non-compliance of the work with the contract specifications (22%).
• The delays in the delivery of the work (20%). The weather conditions, delays in material deliveries, or changes requested by the client may be the causes of the delay.
• The unused reserves by the company (8%).
• The bankruptcies that lead to the abandonment orsuspension of construction (7%).

Other factors are possible, such as invoices that exceed the initial estimate or non-payment for work performed or a disagreement over the contract. However, all construction contractors are subject to an obligation to deliver results, meaning they must deliver completed work that complies to the contract with the client. If they are held contractually liable, they may be ordered to reimburse and compensate the project owner (source).

To better anticipate these issues and avoid conflicts, we suggest six steps to implement from the very beginning of the project. All of these measures have several things in common: communication between the parties, clarity, and adherence to the contract.

The construction contract outlines the relationship with your client from the outset, defining the rights and obligations of each party. There are several types: contract for the construction of a single-family home (CCMI); contractor’s contract; project management contract; or real estate development contract (VEFA). Regardless of the type of document you use, it must include the following terms with the utmost clarity (source): 

• a detailed description of the project;
• costs;
• deadlines;
• payment terms;
• the responsibilities of each party;
• penalties for failure to comply with the terms and conditions;
• the terms and conditions (payment; warranty; termination; amicable dispute resolution; liability; delivery times; order changes, etc.).

Next, complete your project file with various supporting documents, such as your purchase orders and your quotes , and invoices. If your client is a private individual, a detailed estimate is required as soon as the cost of the work exceeds €150 including tax (source). The client accepts your contract as soon as they write “Agreed,” along with the date and their signature, on the estimate and your general terms and conditions of sale.

To help you better manage your large volume of paperwork, don’t hesitate to use EDM software (Electronic Document Management).

In addition to meetings with your client, there are other tasks that are essential for prepare and organize your construction project. This time, your focus is on your teams of employees and subcontractors, as well as your equipment fleet. Several steps are necessary in preparing your construction schedule : 

• Break the project down into several tasks in order to set realistic deadlines in terms of time and resources.
• Select the necessary resources for each task (both human and material).
• Establish the tools and time needed for communication between teams, as well as between the general contractor and the project owner.
• Allow for a reasonable margin for risk management (bad weather, delivery issues, design changes, etc.).
• Place an order from your suppliers.
• Obtain the necessary administrative permits (construction site layout plan, construction drawings, Notice of Intent to Begin Work, etc.)
• Etc.

Communication is a vital factor in a project's success. With a construction site tracking software like Techtime, everyone can track thethe progress of the work in real time. An instant messaging feature is included in the app to schedule meetings or quickly share important information. Photos taken on-site—which are time-stamped and annotated—can serve as evidence in the event of a future claim (source).

Despite these IT advancements, be sure to schedule regular site visits (with or without your project manager present). By inspecting the site in great detail, you’ll have time to identify even the smallest problem and resolve it quickly. Every visit is documented in a site report, as well as in progress reports.

Good to know: It may happen that the client or the project owner. The reasons are mainly financial or related to changes in site conditions (source). In any case, an amendment to the estimate is required to have these changes approved by the client and to ensure full payment (source).

We mentioned this in the first point of our article. The construction defects are one of the main causes of disputes on construction sites. Other incidents can disrupt the smooth progress of construction work, such as fires and water damage, inventory issues, or thefts on the job site.

To avoid damaging your company’s reputation, ask your project owner or an outside manager to conduct a construction site quality control report. This document identifies any construction defects that could lower the building’s rating or, worse, render it unfit for use. By ensuring impeccable quality in your materials and the work of your tradespeople, you reduce your costs while maximizing customer satisfaction. In fact, you won’t have to perform rework.

Once the building is completed, the contractor arranges for the final inspection so that the client can verify the quality of the work. This step is crucial because it marks the beginning of legal warranties, the main ones being (source): 

• the ten-year warranty;
• the warranty of proper operation;
• the warranty of satisfactory completion (GPA).

There are several types of acceptance procedures. In all cases, the parties inspect the building together before signing an acceptance report. If any defects or flaws are found, the contractor has one year to repair them. Once thethe project manager’s reservations are lifted, he signs the Declaration Attesting to the Completion and Compliance of the Work (DAACT).

The document may be used in an out-of-court or judicial context, depending onArticle 1792-6 of the Civil Code. In the latter case, a judge rules on the building’s condition at the time of acceptance based on established case law (source).

Construction law is constantly evolving—whether in terms of legislation, current standards, or regulations—due to environmental and economic issues as well as technological advances. Don’t hesitate to enroll in professional training programs to stay up to date on the latest developments. Consult construction law attorneys to guide you in drafting your documents or to defend your interests (source).

Construction disputes can be avoided with proper preparation before your project begins. With clear contracts and a schedule that allows for flexibility, you can manage your tasks effectively. Maintain the quality of your work through regular site visits and effective communication among all project stakeholders. Our Techtime software offers all the features you need to carry out your projects under the best possible conditions. Contact us now.