Methods Of Dispute Resolution In Commercial Contracts

by gclatworthy on December 24, 2012

  • SumoMe

It is no longer uncommon for commercial contracts, especially construction contracts, to enter into a dispute by one or both parties before the contracted service is complete. Many people in the legal industry believe that this is a direct result of the current economic conditions in the country.

All-too-often, construction projects are delayed or stopped due to a problem with s supplier or sub-contractor. The volatile economy over the last five years has seen many of these businesses go under, leaving the construction company responsible for replacing these products or services quickly, often to the dismay of their client. Delays due to these problems often lead to contract disputes.

If you find that you are facing a contract dispute, ask your lawyer if an alternative form of resolution would be more appropriate to handle the case. Most attorneys, whether it is a CA or a NY construction attorney, find that going to arbitration or mediation is better for them also, and it allows them to help their clients quickly and efficiently.

Alternative Dispute Resolution (ADR)

Many companies and individuals that find themselves in these positions are opting for alternative dispute resolutions (ADR) instead of a long legal battle. These resolutions, which include arbitration both binding and non-binding, and mediation, are quicker, more cost effective, and often result in better outcomes for all parties.

These types of resolutions are encouraged by the court system which has ensured that mediation and arbitration are conducted in a fair manner for all parties. Arbitrators must be neutral on the subject and must encourage both parties and their legal representatives to work together to form a solution to the problem. This type of resolution process has also been very good to lessen the burden on an already over worked court system. In many cases, arbitration can take place as soon as both parties agree, while a lawsuit can take several months just to get an initial hearing by the court.

Other Construction Contract Issues

Another issue that often occurs with construction contracts are labor disputes. Depending on where the contractor is performing services, the employees may be required to work for a union, or at union wages. Disputes may arise over hours or pay rate, benefits or lack thereof. It is not uncommon, however, for these disputes to arise and require the contractor to settle them so that work can be continued.

Alternative dispute resolution can also be used under these circumstances. Much like union bargaining, both sides can come before the arbitrator with their attorneys and work out the problem without ever seeing the inside of a court room.

Construction Contract Wording

Because of the many advantages that these alternate forms of dispute resolution, many construction contracts consist of specific wording requiring that both parties agree to arbitration or mediation as a way to settle any disputes. Furthermore, these contracts can also contain wording that states this is the only method of dispute resolution that they will accept.

Of course, these are not the only types of conflicts that arise in construction or commercial contracts; they are just a few of the most common cases that occur. Any conflict, however, can be settled with arbitration or mediation if one desires a quick solution to their problem. 

Georgina Clatworthy has written many articles on legal topics including conflict resolution and contract law and notes that disputes can arise at anytime and may be difficult to resolve.  Hiring the services of a NY construction attorney from the law firm of Canfield, Madden and Ruggiero, LLP will help you to discuss and explore all realistic possibilities for a positive outcome, whether the issue is a dispute requiring litigation or an issue that could be resolved via a non-adversarial process.

Previous post:

Next post: