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Five Simple Tips to Avoid Litigation on Construction Projects

1. Written and Signed Contracts. Sounds impossible. Contractors would never begin working on a job without first getting a written contract. Nor would they take the time to negotiate a contract and then not return signed originals to each other. These sorts of things happen. Particularly when there has been a long history of work between the parties and there is some sort of urgency to begin the project. My suggestion is not to rely on proposals or handshakes but instead take the steps necessary to formalize the agreement. This simple action helps protect all parties from the good intentions of starting as quickly as possible.

2. Lien Waivers. At the beginning of the job, it should be made clear that all payments to any contractors or suppliers will require lien waivers. This of course should be standard language in your contract but sometimes a party will issue payment without a lien waiver or they will not require a lien waiver from a contractor’s supplier. What this does is create unnecessary risk to the owner and can be avoided by following the policies and procedures outlined in your construction contract.

3. Change Orders. All change orders should be in writing. In the age of modern technology, there is no reason that a change order cannot be approved immediately by an email or a text message. I understand this does not always occur in the field but it is not that difficult to send the person requesting the change an email or text. Six months after a project has been completed memories may fade. An email or text message can help document that the change was requested and approved.

4. Job Logs. I am firm believer that daily job logs are some of the best evidence of what occurred on the construction site. These can be as simple as the handwritten notes of the foreman during the job. I would request documentation of the number of workers on site, the weather conditions, type of work being performed that day, and any unusual circumstances that were encountered. Again, the goal of keeping these logs is so that should a dispute arise you can refer to these logs and hopefully avoid litigation by demonstrating what occurred during the construction.

5. Photographs. Photographs fall into the realm of documentation (similar to job logs). They should show, “What, when, and where.” Unfortunately, I have seen photographs that were not dated or the date was wrong on the picture. These do little good in proving your case if you cannot testify when the photograph was taken. My suggestion is to make sure that any photographs taken include the correct date and time. You may also want to include a note in your daily job logs of who was on site taking photographs.

These are just a few simple tips designed to help avoid litigation. The goal here is to have enough evidence that you can convince the other side it is not worth going to battle.