construction

The Drawbacks of Construction Contracts

Construction contracts have become increasingly difficult over the years. With contracts at times containing over 400 pages of placed responsibilities, not to mention, terms and conditions, owners and contractors are forced to manage risks on an entirely new scale. Because the industry is a complex setting, it shouldn’t come as a surprise that construction delay claims are as common as they are. Owners and contractors continue to rely on legalistic strategies to control and manage the numerous risks associated with the project.

Time is Money

There are some serious drawbacks to disputing resolutions with one of them being money. Contrary to common belief, disputants choosing arbitration over litigation will not save as much money as they expect to. Regardless of the outcome, money will still be a major factor when it comes to the entire process. An alternative disputing technique that has been becoming more popular is construction mediation. Known to be a voluntary process that avoids the court, a third party mediator is hired to assist both parties in finding a settlement.

The Pros of Mediation

One of the benefits of mediation is that there is risk and cost control associated with the entire process. The disputants are the ones that are in control of the entire process, from discussion to negotiation. It’s important that these matters are resolved by both parties rather than someone else as both cost and risk control substantially increase when the latter is not achieved. In the process of mediation, both parties can agree on a mutually beneficial scenario so that no one party has to lose.

Bio: Lyle Charles, of Lyle Charles Consulting, is a steel fabrication expert, structural steel expert, and business consulting with over 40 years in the construction industry.