Construction litigation can have devastating consequences for the parties in a Michigan construction project and the project itself. As one of Michigan Lawyer’s Weekly’s Michigan’s Go-To Construction Lawyers. August Law’s Gary August has litigated countless construction defect lawsuits. Litigation can delay construction progress and cost parties significant money for property holding costs, shut-down/start-up expenses, and litigation expenses. Understanding what can cause construction litigation can help property owners, developers, and construction companies avoid unnecessary and costly litigation.
Common Causes of Construction Litigation
Some of the most frequent causes of construction litigation in Michigan include:
- Contractual Disputes – Parties in a construction project may pursue litigation when one side accuses the other of breaching the parties’ contractual agreements. Contractual disputes can arise due to ambiguous terms in the parties’ contract or architectural plans, or frequent changes to the scope of work that the parties fail to document, leading to differing understandings of the parties’ rights and obligations.
- Payment Issues – Litigation can arise due to payment disputes in construction projects, such as a client’s failure to make timely payments, demands for advance payment to cover materials costs, or disputes over whether contractors have met milestones to trigger their right to payment.
- Defective or Substandard Work – Clients may pursue litigation due to allegedly defective or substandard work that compromises the quality or safety of the project and requires them to pay for additional remedial work.
- Project Delays – Construction project delays and slippage in the project schedule can also lead to litigation if they cause parties to incur unexpected costs or when a construction contract includes “time is of the essence” or “liquidated damages” clauses.
- Permitting or Zoning Issues – Parties may dispute issues related to obtaining necessary building permits and zoning approvals or claims that contractors have deviated from approved plans.
- Worksite Accidents and Safety Violations – Failures to follow safety regulations and protocols can lead to litigation as property owners, developers, and contractors dispute the assignment of liability for injuries and property damage caused by worksite accidents.
How to Prevent Construction Litigation in Michigan
Developers, property owners, and contractors can reduce the risk of construction litigation by following best practices such as:
- Drafting comprehensive contracts utilizing clear language which can avoid ambiguities or unaddressed issues that may lead to disputes arising from parties’ confusion over their contractual rights and obligations. The universal form contracts are just a starting point for a contract. Each provision should be carefully reviewed and discussed.
- Thorough documentation of the parties’ agreements, changes to the scope of work (and corresponding changes to project price), and records of the project’s progress. Daily inspection reports are a must. They detail what work was done, who was on site, what materials were delivered to site, and what the weather was like.
- Timely payment and financial record-keeping through proper invoicing, payment tracking systems, and budgeting procedures to ensure that parties receive payment on time and that projects do not stall due to shortfalls of funds
- Working with experienced legal representatives and construction consultants who can review proposed contracts, negotiate fair and favorable agreement terms, assist with record-keeping and due diligence, and advise parties of their rights and options before simmering disputes escalate into litigation
- Identifying problems earlier, giving proper notices and having legal counsel engaged immediately to negotiate a resolution of the issues before they turn into a project stopping lawsuit.
Contact a Construction Litigation Attorney Today
When you find yourself in a dispute over a construction project in Michigan, get the legal advice and support you need to protect your interests. Gary August at August Law is one of the most respected construction attorneys in the State of Michigan and has litigated some of the largest construction disputes in the State of Michigan. Contact August Law today for an initial consultation with our attorneys to learn more about the common causes of construction litigation and how to avoid getting into a costly dispute.