In construction, a claim or dispute takes place when something causes one party to go beyond the contract and claim for something that was not in it. There are a lot of situations in construction industry that can cause this to happen. A lot of projects usually have one construction claim or are strewn with many.
Construction claims are not a desirable thing to keep nor face. Now we will examine what causes them to happen.
Construction claims due to bond claims
Bond claims are those claims that protect the customer. They also make sure that if their contractor fails to fulfill the contract agreed upon, they will be compensated for the work that wasn’t done.
An example of such is a homeowner named Casey. Mr. Casey determined that his home needs more space and he does not wish to change his suburb. He decides to add on to his house due to the spacious lot.
Once he has chosen his contractor, he has the right to demand a surety bond ensuring that the contractor will agree to their side of the contract. If the contractor fails to do so, Mr. Casey can file a bond claim to be fairly compensated from the shortcomings or wrongdoings of his contractor.
Construction claims due to construction defects
This kind of claim starts when something in the constructed building is not working the way it should work.
An example is of Mrs. Jones is excited that her home’s expanded portion is complete, clean and is fully furnished. She finally has the space she desires and her house feels much like the home she always wanted.
However, after some time, she discovers something is not right. The ceiling in her expanded living room is leaking in heavy rains. This leads to water damage, mold, seepage, rust and a load of other damages.
Mrs. Jones desires a good ceiling, and she certainly does not deserve getting ripped off of her hard earned money. She is hence within her rights to file a claim against her contractor. The reason is that they failed to do the job properly and uphold their end of the bargain and contract.
Contract being breached is another reason for construction claims
Breach of contract is one of the leading causes of disputes in the field and industry of construction. When anyone hears the term ‘in breach of contract’ they might imagine a courtroom scene filled with lawyers, upset people and a puzzle jury. This can happen, but in many incidents of contract breaches in construction, such a scenario isn’t necessary at all.
Two kinds of contract breaches take place:
- Major contract breach (Material).
- Minor contract breach (non-material).
The former affects the actual quality of materials used in a project. This can have quite some implications.
Consider the case of a skyscraper in Dubai, which was built with supposedly good materials. However, building owners see that the bricks used for walls are not the same as what was agreed upon. What is worse is that the stairs vibrate when being used.
Cheap quality materials (cement, paint, glass, steel etc.) were used in constructing that building. Both the contractor, architects, engineers and construction company will face a severe punishment for those matters. A prison sentence with hefty damages, fines and restitution is most likely to happen as the building could collapse if not taken care of.
The latter means the project’s quality is not affected. These kinds of claims are not much of a hassle. In the long run, these occurrences of minor breach of contract do not have much of an effect on the whole project.
Let us consider an example of a contractor named William Perkins. Mr Perkins is working on a project in his small South Dakota town where he is rehabilitating people in the aftermath of a disaster. Because of local shortage of cement and lumber he planned and contracted for use isn’t available, he sources them all from Illinois, Iowa, Wisconsin and Wyoming.
He also looks into what it would take to get all these materials and determines that the project could be set back by a long time. He doesn’t wait and decides to source them all from top notch vendors from nearby states.
A breach of contract is hence committed by Mr Perkins. But since the project quality is good and the situation is for the greater good, it is not a problem. Mr Perkinds also makes a change order to make changes in the contract to allow these materials to come. This way, he’s following expert project advisory to prevent himself from giving into flimsy claims.
