Prior to beginning a new project, construction companies in New York and New Jersey often seek to form a plan to ensure that the project proceeds smoothly. Of considerable concern to contractors are the high costs that are associated with delays. However, even with a well conceived plan, delays still occur and inevitably lead to heated disputes that windup in litigation or arbitration.
In one such case, a construction company filed a lawsuit against the State University of North Dakota in which it sought $1.3 million to cover additional costs caused by delays. The construction company in that case asserted that the delays were the result of flaws in the design of the project. As a result of the delays, it was forced to accelerate its work to accommodate an upcoming dedication ceremony.
What would you do if you were faced with this situation? What does your company's contract say about delays caused by defective designs? Does your contract provide a remedy for this situation? Can your company endure a $1.3 million loss? These questions must not go unanswered. Companies that are exposed to similar situations are encouraged to read and revise their contract to ensure that they are protected. Additionally, contracts should be reviewed periodically to guard against changes in the law.
This task may seem daunting; however, with experienced construction attorneys, the process does not have to be overwhelming. Companies should seek counsel that both handle disputes and draft contracts. That way the company has the best of both worlds -- attorneys that know how to write a contract and can protect a contractor before a problem occurs and attorneys that are involved with construction disputes and can anticipate the situations that must be addressed in a contract. By consulting with a law firm that has this experience, your contracts will be better able to protect you from the problems that are sure to arise on your projects.
Source: bismarcktribune.com, "$1.3 million NDSU building dispute with contractor has landed in court", Patrick Springer, Feb. 20, 2018