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What are some common causes of payment disputes in construction?

On Behalf of | Mar 1, 2024 | Construction Disputes |

The timely collection of payments can be an integral component of smoothing out operations on any type of construction project site. However, if your company works on a variety of projects with numerous other parties, the process of keeping track of all financial transactions can prove complex at times.

There may also be various types of issues that could prompt payment delays in this industry, and such issues remain a leading cause of construction disputes. The path to protecting against payment disputes could involve knowing some of the most common causes of such conflict, but this might not always be enough to keep such challenges at bay.

Common concerns

Any type of payment dispute can create intense conflict among the parties involved. Some of the most prevalent causes of such disputes may include:

  • Improper billing practices: Improper billing practices can create a variety of financial concerns, and taking steps to promote accuracy with billing may be essential to preserving company interests.
  • Poor communication: Poor communication continues to be a leading cause of disputes in this industry, and there are various types of financial challenges that can stem from similar issues.
  • Disputes over change orders: While change orders remain a constant in construction, conflict over payment obligations stemming from change orders can still lead to intense disputes.
  • Failure to pay: Payment disputes can also arise if the parties you work with are unable or unwilling to meet payment obligations, and knowing how to address such challenges could be imperative.
  • Holdback clauses: Factors such as holdback clauses can also lead to payment disruptions, and being thorough when following through with the terms of these clauses could help protect against an unfavorable situation.

Regardless of how it happens, facing any type of payment dispute can be devastating in nature, and sometimes it can be challenging to know how best to approach such a situation.

Facing payment disputes

Construction disputes involving payment-related concerns can place a significant strain on your company’s well-being and interests. Upon encountering such disputes, it could be helpful to consider seeking insight on your legal rights and on the best course of action to take to address the situation. This could prove an integral component to helping you understand what to expect from the process and prepare to create a strategy with which to seek a resolution that best aligns with the needs and interests of your New York construction company.