Increase in construction projects means increased possibility of contract disputes

5/9/2012 | Construction Blog, Real Estate Blog

According to the Philadelphia Business Journal, construction activity in the Philadelphia region increased in March, with nonresidential construction increasing by 96 percent from last March. In terms of dollars, $197.7 million in contracts were reported last year, compared to $387.1 this year. Residential building reportedly increased by 57 percent to $281.2 million, compared to last March’s $179 million. Substantial increases were seen in construction projects involving commercial, manufacturing, educational and religious properties, going from $163.9 million to $323.1 million.

With the increase of construction projects in the Philadelphia area, there is also an increase in the possibility of construction contract disputes. A number of issues can come up with such contracts, including indemnity provisions, insurance, contractor and subcontractor issues, surety bonds, waivers of subrogation, and so on. A great number of construction contract disputes, however, arise from using standard contracts and changing only the details of the contracting parties.

Because the risks associated with a construction project will be unique to each project, construction contracts should be carefully drafted and scrupulously reviewed in order to protect the interests of each party. Doing so will help prevent potential problems and clearly define liabilities if a dispute arises.

In the course of business, companies often develop standard contracts for certain transactions, and it is easy to grow lax in consider the issues that may arise. Simple advice is to have construction contracts reviewed by a knowledgeable attorney. This will ensure that the contracts are consistent and up-to-date, and entirely legal.

Source: Philadelphia Business Journal, “Phila. Region construction activity up in March,” May 8, 2012