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Construction Claims

A construction claim is a claim brought by a contractor against the party hiring the contractor requesting additional money due to a change in the terms of the contract.  Many changes in the contract are done innocently, however it often costs the contractor money that he is unable to make up without issuing a claim.  A quick example would be the contractor hiring a crane to come in a certain date to move a heavy piece of machinery into a building.  If the night before the other party calls to say that they aren’t ready for the crane yet, the contractor will be out a lot of money, not through any fault of their own.

One of the easiest ways to avoid construction claims is to make sure that both parties are very well informed of what the other is doing.  If any potential delays are expected, the other side should be told as far ahead as possible to reduce the money it may cost for the delay.  The more open both sides are, the easier the whole construction job becomes.  The unfortunate truth is that most contracts are written by lawyers and can only be read by other lawyers which make it difficult for the two sides to know what is explicitly spelled out in the contract.

There are 3 general rules you should follow to limit the number of construction claims you have to deal with.  First of all, know exactly what the contract says.  Know what msut be done by what deadline.  Secondly, do exactly what the contract requires.  By doing your half of the contract you ensure the other side can’t make a claim against you.  Lastly, talk about any potential changes as soon as possible.  The sooner you tell the other party the quicker they can take to limit any monetary damages the change causes.