In New York City, construction projects move fast, and the contracts behind them are often just as complex as the work on-site. Between strict deadlines, multiple parties, and ever-changing conditions, it’s no surprise that construction contract disputes are a common headache for both developers and subcontractors.
Whether you’re managing a multi-million-dollar development or working under a tight subcontract, knowing how to handle—and hopefully avoid—contract conflicts can save you time, money, and reputation. Here’s what you need to know.
Common Causes of Construction Contract Disputes
Disputes can erupt for all kinds of reasons, but in our experience, most stem from one of the following:
- Payment issues: Late payments, underpayments, or disputes over retainage
- Scope disagreements: When work goes beyond what’s outlined, and nobody agrees on who’s responsible
- Project delays: Missed milestones or late deliveries can trigger breach of contract claims
- Unapproved changes: Change orders that were verbal or undocumented
- Alleged defects or quality disputes: Claims about poor workmanship or use of improper materials
- General non-performance: One party failing to hold up their end of the deal
Many of these disputes begin with a single miscommunication and spiral from there. In a high-pressure environment like NYC construction, minor issues can escalate quickly.
Key Contract Clauses to Watch
Before the first brick is laid or the first invoice is sent, it’s critical to understand your contract thoroughly. Here are a few clauses that tend to be at the center of most construction disputes:
- Scope of Work: Defines exactly what’s included (and what isn’t). Vague descriptions leave too much room for argument.
- Payment Terms: Look for details about billing frequency, retainage, and penalties for late payments.
- Change Order Procedures: Contracts should specify how changes must be approved—ideally, in writing.
- Termination Clauses: Outline the conditions for terminating the contract and specify the consequences for unfinished work or unpaid invoices.
- Dispute Resolution: Some contracts require arbitration or mediation before going to court. Know what you’re signing up for.
Even if you didn’t draft the contract yourself, understanding these terms can help you enforce your rights later.
What to Do When a Dispute Arises
When a construction contract dispute breaks out, your legal options depend on what the contract says—and how you’ve documented your side of the story.
Here are some common ways disputes get resolved:
- Negotiation: Sometimes, a direct conversation backed by good records is enough to settle the issue.
- Mediation: A neutral third party assists both sides in reaching an agreement without resorting to court.
- Arbitration: A more formal process than mediation—usually binding—often required in construction contracts.
- Litigation: If other options fail, you can take the matter to court.
- Mechanic’s Lien: Subcontractors and suppliers can file a lien to claim unpaid funds against the property itself, but deadlines are tight and rules are strict in NYC.
Regardless of the path, you’ll want to ensure that you have clear documentation, including signed contracts, email threads, change orders, invoices, site logs, and photos. These will make or break your case.
How Kohan Law Group Can Help
At Kohan Law Group, we work with developers, general contractors, and subcontractors throughout New York City to resolve construction disputes quickly and effectively. Whether it’s a billing issue, a disagreement over scope, or an accusation of defective work, we’ll help you take the proper steps, without disrupting your entire project.
We also offer upfront contract reviews to help prevent future disputes and make sure your agreements are enforceable under NYC construction law. With deep experience navigating local building codes, lien enforcement rules, and court procedures, we’re ready to support you through any stage of your project.
Tips to Prevent Future Disputes
While not every dispute can be avoided, a few good habits go a long way in reducing risk:
- Put everything in writing. Verbal promises won’t hold up if things go south.
- Use clear, specific contracts. Spell out responsibilities, timelines, and how changes will be handled.
- Track everything. Keep daily reports, receipts, and signed documentation.
- Have a lawyer review your contracts. A short consultation can save thousands in legal fees later.
Construction in NYC is competitive and fast-paced—solid legal groundwork helps keep your projects on track.
Legal Help for Construction Contract Disputes in NYC
Construction contract disputes are common in New York, but they don’t have to derail your business. Knowing your rights, understanding your contract, and getting legal support early can make the difference between a quick resolution and a costly court battle. Contact the Kohan Law Group today to learn how we can assist you.