Do supply chain issues lead to claims against construction firms?

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Do supply chain issues lead to claims against construction firms?

On Behalf of | Nov 10, 2022 | Construction Litigation

There are always challenges for construction companies, regardless of whether they build new school buildings or they help homeowners remodel their existing properties. Construction firms often negotiate in-depth contracts with their clients and then have to manage countless variables as they seek to fulfill their obligations to their clients. They may take partial payment initially with the balance due upon completion.

When homeowners or other clients believe that a construction company provided substandard work or violated their contractual agreement, they may bring a construction claim against the business. Issues ranging from timing to the appearance of the final product might result in expensive breach of contract or construction defects claims.

Will supply chain issues put your firm at risk of a lawsuit?

Materials are crucial to successful project completion

Especially when you have a homeowner who wants prestige materials used in their homes, an issue with your supply chain could cause significant challenges for a project. Maybe they want a rare kind of  hardwood flooring, and it is back ordered to the point where you do not know when you can complete the project. Perhaps the client is a local school district rather than an individual homeowner. A shortage of structural steel might lead to indefinite delays in project completion.

Supply chain issues don’t just cause timing issues but can also lead to claims about the estimate or quote your company provided. Perhaps the company that has long supplied your firm with countertop materials increased their prices by more than 30%, or maybe they closed up shop, forcing you to go with a different business that charges far more for the same material. Upset clients may bring claims against your business when you increase what you intend to charge them.

Communication and proactive contracts can protect you

If you address the various issues that could arise during the project in your contract, you may not have to worry about claims by dissatisfied clients bringing claims against your company in the middle of a project or after the completion of one.

Focusing on proper contract creation and effective communication can decrease the likelihood of your firm facing an expensive and reputation-damaging breach of contract or construction defect claim.

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