The best way for any subcontractor, general contractor, or owner to protect themselves when it comes to change order disputes, construction delays, or payment disputes is through the contract itself. You need a solid foundation, and that often requires an experienced attorney to review the contract before you sign.
I have yet to see two contracts that are exactly the same. The details in every single one are different. Payment provisions vary widely—what the contractor must submit to the owner for proof of payment, when payments are due, when applications are submitted, and what the owner can dispute. All of it changes from contract to contract.
The type of dispute will dictate how you should handle it. Non-payment calls for quick action like mechanics liens. Change orders require documented approvals. Delays demand proof of responsibility. Material price escalations need specific clauses. Your role—owner, general contractor, or subcontractor—changes everything about how you approach the dispute and what language protects you best.
Common Types of Construction Contract Disputes and How to Handle Them
Payment Disputes (Non-Payment or Late Payment)
These are the most frequent. Owners withhold for alleged defects. Contractors wait endlessly.
How to handle: File a mechanics lien immediately—California deadlines are strict (90 days from last work for private projects). Use prompt payment laws to claim interest. Your contract should define clear milestones and retainage release.
Change Order Disputes
Extra work without agreed pricing or scope blows budgets.
How to handle: Require written change orders before proceeding. Document everything. Contracts should outline approval processes and markup rates.
Delay Disputes
Someone always pays for lost time.
How to handle: Prove who caused the delay (owner approvals, weather, subcontractor issues). Excusable delays (force majeure) should grant extensions without penalties. Owners want liquidated damages; contractors need no-damages-for-delay protections overturned if unconscionable.
Material Price Increase Disputes
Today’s climate brings tariffs, COVID disruptions, and inflation. Prices skyrocket on long projects.
How to handle: Include escalation clauses tied to indices. Owners resist them; contractors and subs need them desperately. Without one, you eat the costs.
Construction Materials Prices Rise 0.4% in July | Engineering News-Record
Why Your Role Dictates the Handling Strategy
Depending on whether you are the owner, general contractor, or subcontractor, you want different language—and different dispute approaches.
- Owners → Protect against delays with strict completion dates and damages. They handle disputes by enforcing penalties and withholding payments.
- General Contractors → Need extensions for delays beyond control and pass-through protections. They handle disputes by documenting owner-caused issues and seeking equitable adjustments.
- Subcontractors → Require pay-if-paid clarity and direct lien rights. They handle disputes by stopping work safely and filing liens quickly.
In one case several years back, owner delays lasted months. Fuel costs alone rose almost $300,000. Under original terms, our general contractor client faced ruin. We found language allowing termination after consecutive delay days, backed out, renegotiated, and saved the business. Someone always absorbs those costs—proper language decides who.
Pitfalls That Complicate Disputes
Contracts over 100 pages hide endless traps:
- Conflicting sections creating ambiguity
- Mandatory mediation adding time and $15,000+ costs
- Binding arbitration waiving jury trials
An attorney spots these and overturns unfavorable provisions.
Common Questions Clients Ask About Contract Disputes
When should I get a lawyer involved?
Before signing—and immediately if dispute arises. Early review prevents most problems.
Can I resolve without court?
Yes, through negotiation or mediation, but do not agree to binding arbitration lightly.
What if the contract has conflicting language?
Courts interpret against the drafter; attorney review clarifies in your favor.
How long do I have to file a lien or sue?
For breach of a written contract, you generally have 4 years to file a lawsuit, and for breach of an oral contract (including verbal change orders that are not in writing), you generally have 2 years. However, a mechanics lien is different: you only have 90 days from the date the lien is recorded to file a lawsuit to foreclose on the lien and enforce it. If you miss this 90‑day deadline, the lien automatically expires by operation of law, becomes unenforceable, and the owner can have it removed from the property’s title, leaving you with no lien rights or leverage against the property itself.
Do AIA standard forms protect me enough?
No—modifications create risks. Always customize.
What damages can I recover?
Direct costs, consequential, lost profits—if provable and not waived.
At Hafif-Stonehouse Law Group, we step into your shoes and fight aggressively. We have prevailed in multimillion-dollar disputes by leveraging contract details others miss.
If you face a construction contract dispute—or want to prevent one—call us for a free consultation. The type of dispute and your role guide the strategy, and we know how to win.