Construction disputes rarely start with bad intentions, but they can arise if parties interpret their rights and obligations differently.
A clearly drafted contract may sound straightforward, but getting this right could potentially help prevent disputes before they arise.
Our construction solicitor, Lauren Attewell, explains what must be clear in a construction contract and how to avoid misunderstandings.
Why do you need clear contractual terms?
Construction projects can involve clients, contractors, subcontractors and suppliers, who are often working under tight time and cost pressures.
If contract terms are buried in dense legal language or left vague, misunderstandings are almost inevitable.
Using clear, plain English does not weaken a contract but ensures that everyone understands what is required, when it must be done and what happens if something goes wrong.
This clarity improves operational efficiency on site and supports compliance with safety and regulatory requirements. It also reduces the risks of disputes escalating into costly litigation.
Courts often favour clarity and ambiguous clauses could be interpreted against the party who drafted them and undermine their legal position.
What are the contract pitfalls that lead to disputes?
Some of the most common causes of construction disputes stem from poor drafting, including:
- Unclear scope of works – leading to disagreements over what works are included or excluded from the contract
- Vague payment terms – creating uncertainty around valuation and entitlement and could led to payment terms being implied into the contract.
- Missing or unclear time obligations – including completion dates and extensions of time
- No dispute resolution – forcing parties straight into legal proceedings
Verbal agreements and assumptions also present serious risks and parties could remember things differently months or years later if not properly recorded.
What should a contract set out?
To reduce the risks of disputes, your construction contract should clearly define:
- The scope of the work and standards required
- What to do if a delay occurs and extensions of time
- Payment terms and consequences of late payments
- Risk allocation, including responsibility for defects and insurance requirements
- Dispute resolution procedures, such as negotiation or mediation
These can help remove uncertainty and ensure that any decisions on site can be made by referencing the contract.
How can we help you?
Early legal support is invaluable at the drafting stage and our Construction Law team can help review your contract so that it is enforceable.
A clearly drafted construction contract won’t eliminate every risk, but it can help reduce confusion and uphold your reputation and legal position if a dispute arises.
For support drafting or reviewing your construction contract, contact our team today.
