Why Construction Disputes Happen - PART 2
Date: 28 July 2025
Construction projects are complex undertakings involving multiple stakeholders, tight deadlines, and significant financial investments. Despite the best intentions, disputes are common in the construction industry. These conflicts can delay projects, increase costs, and damage professional relationships. Understanding the root causes of construction disputes is essential for preventing them and ensuring smoother project execution.
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Delays and Time Overruns
Delays and disruptions are a frequent source of disputes in construction. They can be caused by weather, labor shortages, supply chain issues, unforeseen site conditions, design errors and omissions, variations etc. When delays occur, parties may disagree on who is responsible for the delays and whether the delays were on the critical path and whether compensation or extensions arewarranted.
Example: In a large infrastructure project involving the construction of a highway interchange, delays arose due to unexpected subsurface rock formations, late delivery of prefabricated bridge components, and a shortage of skilled labor during peak construction months.
The contractor requested an extension of time, arguing that the delays were compounded by the client's own late approvals of key design changes and slow responses to RFIs (Requests for Information), which created a bottleneck in scheduling and procurement. They maintained that even if some delays were foreseeable, the cumulative impact—known as "concurrent delay"—was significantly influenced by the client's actions.
The client, however, rejected the EoT claim, asserting that the contractor failed to mitigate its own delays and should have adjusted the schedule accordingly. The dispute escalated into formal proceedings, requiring a forensic delay analysis to determine responsibility and assess entitlement to time and cost relief.
Another Example: Commercial Tower Development
In a high-rise commercial tower project in a metropolitan area, the contractor submitted a baseline schedule that appeared comprehensive but lacked realistic logic links, accurate durations, and proper sequencing of critical activities. The schedule showed overly optimistic timelines for structural works and failed to account for known constraints such as limited crane availability, long lead procurement of steel and restricted working hours due to city regulations.
As the project progressed, discrepancies between actual progress and the planned schedule became evident. Key milestones were consistently missed, and the contractor frequently issued revised schedules that re-sequenced activities without proper justification or documentation. These revisions masked delays and made it difficult for the client and project manager to assess the true status of the works.
The client raised concerns about the lack of schedule integrity, arguing that the contractor’s program was not a reliable tool for project control or delay analysis. The contractor, in turn, claimed that delays were due to client-driven changes and late approvals, but failed to demonstrate these impacts through a coherent and defensible schedule update.
The dispute escalated when the contractor submitted a claim for an extension of time and associated costs. The client rejected the claim, citing that the contractor’s schedule manipulation and poor planning undermined the credibility of the delay analysis. An independent expert was appointed to conduct a schedule audit, which revealed that the contractor had retroactively altered logic links and float values to shift responsibility for delays.
Ultimately, the adjudicator found that the contractor’s failure to maintain a transparent and accurate schedule contributed to the dispute and limited their entitlement to time and cost relief.
Payment Issues
Example: In a commercial fit-out project for a retail chain, the contractor submitted a progress claim for 80% completion, including variations for additional lighting and upgraded flooring requested by the client. The client’s representative certified only 60% of the claim, citing concerns over the quality of finishes and lack of formal approval for the variations.
The contractor argued that the variations were verbally approved on-site and that the quality concerns were minor and easily rectifiable. As cash flow tightened, the contractor issued a notice of suspension due to non-payment under the contract terms. The client responded by terminating the contract for non-performance, leading to a protracted legal dispute involving expert assessments, valuation disagreements, and competing claims for damages.
This example highlights how disputes over valuations, verbal variation approvals, and performance assessments can escalate into serious financial and legal conflicts—especially when documentation is lacking, or subjective judgments are involved.