Why Construction Disputes Happen - PART 1
Date: 21 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.
Schedule a free consultation with Fouad El Chikhani for expert advice.
Poor Communication
One of the most common causes of construction disputes is poor communication. Misunderstandings between contractors, clients, architects, and subcontractors can lead to errors, delays, and unmet expectations. When project goals, changes, or responsibilities are not clearly communicated, conflicts are almost inevitable often resulting in additional costs, delays and disruptions.
Example: During the construction of a multi-story office building, the client representative verbally instructed the site supervisor to adjust the ceiling height in the lobby to accommodate a new lighting design. However, this change was not documented in the updated plans and consequently the message was not relayed to the subcontractor. As a result, the framing was completed based on the original documentation. When the lighting fixtures arrived, they didn’t fit the space, requiring demolition and reconstruction of part of the ceiling. A dispute arose between the contractor and the client regarding liability for the additional costs, with each party asserting that the communication failure originated with the other.
Ambiguous or Incomplete Contracts
Contracts are the foundation of any construction project. If a contract lacks clarity or fails to address key issues such as scope of work, timelines, payment terms, or dispute resolution mechanisms, it can lead to disagreements. Vague language or missing details often result in different interpretations, which can escalate into disputes.
Example: In a contract for a new school building, the architectural drawings showed a specific type of acoustic ceiling tiles in the classrooms, while the written specifications listed a different brand and performance standard. Both specified materials in the drawings and specifications are fit for purpose.
The contractor followed the drawings and installed the tiles shown, assuming they took precedence. However, during inspection, the client insisted that the specifications governed the contract and demanded replacement with the specified tiles, citing concerns about sound absorption quality. The contractor argued that the drawings were clearer and more recent, leading to a dispute over which document held contractual authority and who should bear the cost of replacement.
This example illustrates that when a contract does not clearly state which document takes precedence, it can lead to costly misunderstandings and disputes.
Scope Changes (Scope Creep)
Changes to the project scope after work has begun—commonly known as "scope creep"—can disrupt schedules and budgets. If these changes are not properly documented and agreed upon, they can lead to disputes over additional costs, responsibilities, and deadlines.
Example: During the construction of a high-end retail store, the client decided to add a custom-designed feature wall, change the lighting layout to include designer fixtures, and install a smart climate control system—all after the initial plans were approved and work had begun. These changes required additional design work, specialized subcontractors, and extended the timeline by three weeks.
However, the client insisted that these were enhancements, not scope changes, and expected them to be included in the original budget. Because the contractor did not issue formal variation orders or update the contract, the client disputed the final invoice, leading to a legal dispute and delayed payment.
This version adds more complexity and realism, showing how scope creep can affect multiple aspects of a project—design, labor, timeline, and finances—and why formal documentation is essential.
Another example: A homeowner hired a contractor to renovate their kitchen, with a clearly defined scope that included new cabinetry, countertops, and flooring. Two weeks into the project, the homeowner began requesting additional upgrades—such as extending the renovation to include the adjacent dining area, installing high-end appliances, and adding custom lighting.
The contractor, eager to maintain a good relationship, agreed to the changes verbally and began the extra work without issuing formal variation orders or updating the budget. When the final invoice reflected the additional labor and materials, the homeowner contested the charges, arguing that the contractor had not provided written estimates or obtained approval for the extra costs.
This example shows how informal agreements and lack of documentation can lead to misunderstandings and payment disputes, even in smaller-scale projects.