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Can a delay in a construction project lead to litigation?

On Behalf of | Oct 6, 2023 | Small Business

Construction litigation can be a very stressful experience for all the parties involved. Disputes can take months to resolve. Going to court can also be expensive and could damage the reputation of the businesses embroiled in the dispute.

Such litigation might stem from a variety of issues. Some construction-related lawsuits are the result of defects with a property caused by cheap materials or unprofessional work. Sometimes, the issue that leads to litigation is a substantial delay in construction. Is a lawsuit usually what happens if a construction company falls behind on its project timeline?

The contract determines the consequences of a delay

Every construction project is as unique as the location and the materials used. Although construction companies may do their best to estimate a reasonable timeline for project completion, countless issues could come up that will delay the project.

Therefore, most construction companies include clauses in their contracts that protect them from immediate litigation if they cannot abide by the estimated timeline for the project. They may need to provide formal notice to the clients, and such clauses may only protect from litigation in specific scenarios, such as when weather issues or supply chain disruptions prevent the work from going forward.

In scenarios where the delay is intentional or the result of incompetence, a company might still face litigation even if they attempted to include protective clauses in their contract with the client. The greater the losses for the client because of the delay, the more likely they are to pursue litigation when a construction company doesn’t complete a project on time.

Reviewing a contract for a construction project with an attorney to better understand everyone’s rights, responsibilities and options is often a good starting point for those contemplating the possibility of construction litigation related to project delays.