Can I Be Forced to Arbitrate a Dispute Over a Construction Contract?

Disputes in the construction industry are very common. In fact, they are so common that most construction contracts have a lengthy section that includes provisions for how a dispute between the parties is to be handled should one arise. Unfortunately, some people fail to thoroughly read through those provisions prior to signing a contract. It then comes as a surprise down the road when they are told they are required to arbitrate a dispute over a construction contract; however, the terms of their contract may, indeed, require arbitration.

Though disputes can occur in any industry, the construction industry seems to be ripe with disputes. Disputes can erupt over materials, workmanship, completion time, or just about any other aspect of a project. When a dispute does arise, it can be very costly, both in terms of time and money, to resolve. Often, the parties to a construction contract are from different states, meaning more than one state could have jurisdiction over the dispute. Once the jurisdictional issue is resolved, it can take months to actually get into court, all the while the project is at a standstill. Every day that a project is shut down can cost the parties money. With all of this is mind, most construction contracts include a lengthy section addressing how disputes are to be handled. Although not all construction contracts require the parties to submit to arbitration when a dispute arises, many do.

Arbitration is a type of alternative dispute resolution, or ADR. Arbitration involves a neutral third party (the “Arbitrator) deciding the dispute without the need for the time and expense of formal court proceedings. Most arbitration clauses include procedures for choosing an arbitrator as well as additional details about how arbitration will be handled. The clause will also indicate whether the parties must accept the decision of the arbitrator or whether the parties have the right to appeal the decision.

If you entered into a construction contract that has an arbitration provision in it and you find yourself in a dispute with the other party you will likely have to follow the arbitration provisions of the contract and allow the dispute to be resolved by an arbitrator. If you have questions about your construction contract, or you are unsure whether arbitration is required, contact an experienced Conshohocken, Pennsylvania construction law attorney as soon as possible to discuss your options. Contact the construction law attorneys at Curley & Rothman, LLC by calling 610-834-8819 today to schedule your free consultation.