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When might a construction delay lead to disputes?

On Behalf of | Jun 17, 2021 | Business Law

Construction delays happen for all kinds of reasons. For example, lumber costs recently spiked and have only just begun to come back down. Given the drastic impact that tripling the price of a crucial material can have on a project, companies may have delayed lumber-heavy projects until the market balanced back out.

Sometimes, the delays that slow down a construction project are reasonable, like waiting for lower lumber prices. Communicating these issues to clients quickly and making sure everyone understands why the delay happened is important.

When does a construction delay potentially lead to an actionable dispute?

When there is no legitimate reason for the delay

Did the company doing the construction choose to take multiple four-day weekends in a row, adding substantially to the time required to complete the project? Did they forget to submit paperwork or make other obvious mistakes?

If there isn’t a compelling, excusable reason for the delay that falls outside of the control of the company providing the service, the client or customer may become angry and might even take legal action.

When the delay has an unquestionable financial impact

Extending a six-month construction project by one extra week likely won’t cause catastrophic losses for the client. On the other hand, a project estimated to last four or four weeks that ends up taking 16 weeks to complete could have very negative financial implications for the individual or company commissioning the project.

The longer the delay, the more questionable the reason for it and the more significant the impact on the client are, the more likely it is for construction projects that go off schedule to result in significant construction disputes.