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Must all construction contract disputes be litigated?

Construction projects in Massachusetts involve many parties, so it is inevitable that sometimes these parties will have disputes regarding contracts they have with one another. These types of disputes are not unusual. However, issues such as breach of contract can cost the parties a lot in time, money, labor and opportunity. Therefore, it is important that claims involving construction contracts be resolved in a satisfactory manner.

Some people may assume that the only way to resolve a construction dispute is to go to court. However, there are alternative dispute resolution processes that may be available to them. These include mediation and arbitration.

Through mediation, both parties to a dispute will negotiate a settlement with the aid of a mediator. A mediator is a neutral third-party who helps facilitate discussions between the parties to the dispute. Mediators serve as a sounding board and a go-between that encourages the parties to have productive conversations that eventually lead to a settlement they both find satisfactory. However, a mediator is not a decision-maker; it is up to the parties to reach a resolution.

Arbitration, on the other hand, may lead to a binding resolution. Through arbitration, each party will present evidence and arguments regarding their side of the story in a setting that is less formal than traditional litigation. A neutral, third-party arbitrator will then issue a decision on the case. In binding arbitration, the decision the arbitrator makes generally cannot be overturned. In nonbinding arbitration, either party can pursue litigation if they disagree with the conclusions the arbitrator makes.

Of course, sometimes the best way to resolve a construction contract dispute is to take preventative measures to avoid one in the first place. For example, parties can enter into dispute prevention agreements. In addition, each party should make sure to read the contract, so they understand what they are agreeing to. While these simple steps may prevent construction disputes, if a dispute does arise, it is good to know that there may be options other than litigation that better meet the needs of both parties.

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