GROUP 5

BSCE-4B
Group 5 Members:

• Mark Rondel • Kyla Mae Bernardo

• Bea Marco • Alvin Concepcion

• Jericha Pagaduan
1
 Part 1-What is Dispute?

A dispute refers to an argument or

disagreement between people or
groups. It can take various forms,
such as an official disagreement
between workers and employers, or
a territorial dispute between two
countries with a common border.
2
 Part 2-What is Construction Dispute?

• Disagreement or conflict that can arise

during or after a construction project.
• Typically construction dispute occur
between the owner and the main
contractor, subcontractors, sub-
subcontractors and design
professionals.
3
Part 3- Leading Causes of Construction Dispute

Design Error
Construction projects begin with blueprints. If there are
errors or omissions in the design phase, these can lead
to significant problems as the project progresses.
Consider the case where the plans call for a particular
type of window that later turns out to be too large for
the allotted space. Correcting such errors can result in
extra cost and time, thereby sparking potential disputes.
Part 3- Leading Causes of Construction Dispute

Delays
Time is a precious commodity in construction; when
projects get delayed, it can have a cascading effect on
everything else, from budgets to stakeholder
relationships. For instance, take a project scheduled for
completion in six months, but the timeline gets extended
to nine months due to an equipment malfunction or the
unavailability of specific materials. This disrupts the plan
and increases the overall project cost, leading to
potential disputes down the line.
Part 3- Leading Causes of Construction Dispute

Scope Changes
Changes in the project’s scope midway through
construction can also lead to potential stakeholder
disputes. For example, a client might suddenly want an
additional bathroom on their property. These kinds of
abrupt changes can lead to disagreements over project
timelines, costs, and contract terms.
Part 3- Leading Causes of Construction Dispute

Contract Issues
Contracts form the legal backbone of construction
projects. If they are unclear or if parties interpret clauses
differently, it can cause disputes. For example, let’s say a
contract vaguely defines the quality of materials to be
used, and then the contractor uses a lower quality than
the client expected—this kind of poor planning and
communication can easily trigger a dispute.
Part 3- Leading Causes of Construction Dispute

Payment Disputes
Money-related issues are always sensitive, and disputes
can occur over payment terms, outstanding invoices, or
unexpected costs. A contractor might, for example,
invoice for extra work that wasn’t initially agreed upon,
leading to potential disagreements among the parties
involved.
Part 3- Leading Causes of Construction Dispute

Differing Site Conditions

Sometimes, the actual site conditions can be different
from what was initially understood or presented. For
example, the ground may be rockier than expected,
making excavation more difficult and costly, and the
difference between anticipated and actual conditions
can stir up a prospective dispute.
4
 Part 4-Types of Construction Dispute

Legal Disputes

Financial Disputes

Scheduling Disputes

Performance-related Disputes
 Part 4-Types of Construction Dispute

Legal Disputes

Construction projects are tangled in a web of laws

and regulations, and any non-compliance can give
rise to disputes. This could be due to violating
certain building codes, non-adherence to safety
regulations, or needing to obtain the necessary
permits or licenses. A common example would be
when a contractor fails to comply with the stipulated
safety guidelines, potentially endangering the
workers and leading to a legal dispute.
 Part 4-Types of Construction Dispute

Financial Disputes

Finances are a common bone of contention in the

construction industry, which can involve various
issues, from disagreements over the cost of
completed work, disputes over contract sums, or
non-payment of invoices. The impact of such
disputes can be quite substantial, leading to project
delays, work stoppages, or even termination of
contracts.
 Part 4-Types of Construction Dispute

Scheduling Disputes

Time, a vital resource in construction projects, often

leads to disagreements when managed poorly.
These disputes typically arise when there are delays
in the project timeline due to factors like late
deliveries, slow approvals, or poor task
management. For instance, if a key subcontractor
fails to complete their work on time, it could
potentially derail the entire project schedule, leading
to a scheduling dispute.
 Part 4-Types of Construction Dispute

Performance-related Disputes

These types of disputes are tied to the quality or

standard of the completed work, which occurs when
the client or another party feels that the finished
work or materials used do not meet the standards
outlined in the contract. An example could be when
a contractor uses a lower-quality material than what
was agreed upon in the contract, resulting in a
dispute related to the quality of work.
5
Part 5- How to Avoid Construction Dispute

 Keep Clear Communication

 Have Detailed Contracts

 Regular Project Meetings

 Maintain Thorough Documentation

 Hire a Good Team

 Seek Legal Advice

Part 5- How to Avoid Construction Dispute

 Keep Clear Communication

Good communication is the backbone of

any successful construction project. Ensure all
project goals, plans, and expectations are clearly
communicated to all stakeholders right from the
start. Regularly check in with your team,
subcontractors, and the client to keep everyone on
the same page.
Part 5- How to Avoid Construction Dispute

 Have Detailed Contracts

A well-drafted contract can be a lifesaver.

Ensure your contracts are comprehensive,
specifying everything from scope of work and
payment terms, to timelines and quality
expectations. If any changes occur, update the
contract and get it signed by the relevant parties.
Part 5- How to Avoid Construction Dispute

 Regular Project Meetings

Regular meetings provide a platform for

open dialogue, allow for status updates, and create
an opportunity to address any concerns or
potential issues. It’s an effective way to keep
everyone informed and nip any brewing disputes in
the bud.
Part 5- How to Avoid Construction Dispute

 Maintain Thorough Documentation

Good record-keeping help prevent and

resolve disputes. Document everything from
contract changes and email conversations, to work
progress and site conditions. If a dispute arises, this
evidence can prove invaluable.
Part 5- How to Avoid Construction Dispute

 Hire a Good team

A competent, experienced team can help

ensure a project runs smoothly. Take the time to
vet your subcontractors and suppliers. Look for
those with a good track record, who understand
their roles and responsibilities, and are committed
to delivering quality work.
Part 5- How to Avoid Construction Dispute

 Seek Legal Advice

Have a lawyer review your contracts and

agreements to ensure they are legally sound. An
experienced construction lawyer can help provide
guidance to ensure you’re well-protected.
6
Part 6 – How to Resolve Construction Dispute

01 Negotiation

Often the first step towards resolving disputes,

negotiation is a simple, direct approach where the
parties involved communicate to arrive at a mutually
agreeable solution. Negotiation can potentially preserve
relationships and is often the quickest and most cost-
effective method of dispute resolution.
Part 6 – How to Resolve Construction Dispute

02 Mediation

When negotiation fails to bridge the gap, mediation can

be a powerful tool to help resolves disputes. Mediation
involves a neutral third party, known as a mediator, who
facilitates communication between the conflicting parties
and helps guide them to a mutually acceptable solution.
It’s important to note that the mediator doesn’t impose a
decision but works to help the parties find common
ground.
Part 6 – How to Resolve Construction Dispute

03 Arbitration

If mediation doesn’t resolve the dispute, arbitration

could be the next step. In arbitration, a neutral third
party, the arbitrator, examines the facts and makes a
binding decision. This process is generally quicker and
less formal than court proceedings, and its binding
nature is often preferred in construction disputes to
ensure finality.
Part 6 – How to Resolve Construction Dispute

04 Litigation

The most formal method of dispute resolution is

litigation, involving a court process where a judge or jury
makes a binding decision. While it can be time-
consuming and expensive, litigation is sometimes the
only suitable method for complex or high-value disputes
that cannot be resolved through other means.