Aldrich Law Firm, Ltd.
Aldrich Law Firm, Ltd.

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Reducing construction contract dispute risks

It’s standard practice for an attorney to advise all parties involved with a construction project in Nevada to read applicable documents before signing anything. Advancing with building plans without full knowledge of what’s in a contract can increase the risk of legal action. A common area of oversight is contract documents incorporated by reference (IBR). These are separate documents referred to in the primary contract but not physically included. Examples are upstream contracts, specifications and safety policies.

Business and commercial litigation may also result from not completing tasks that should be “reasonably inferred” even though they aren’t spelled out in a contract. For instance, if a drawing does not specifically show connections for sinks, toilets or showers in a bathroom, it can still be reasonably assumed that such work still needs to be done.

Another possible source of disagreement is responsibility for adhering to various ordinances, laws, rules and regulations. This type of dispute risk may be minimized by making it clear that corrective work isn’t to be performed without a change order as long as all work is completed as per contract specifications. A provision that only holds contractors and subcontractors responsible for upholding codes and standards with work they do may provide protection against code issues overlooked by an architect or design firm. However, it may be necessary for a contractor to submit a request for information (RFI) if they are aware of code issues with the design prior to starting their work to avoid litigation related to problems they knew existed.

A lawyer may also reduce the risk of contract disputes by recommending a ‘time is of the essence” clause to establish mandatory completion dates for all parties. With some projects, an attorney might suggest allowing one party to obtain additional insurance coverage from another party if they agree to accept certain responsibilities. For example, a contractor may agree to be responsible for job site safety if they have more experience in this area.

John P. Aldrich
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