04 / 04 / 2017

How to Effectively Settle a Dispute with Your Contractor

how to settle a contractor dispute

What can you do if you think your contractor is not doing the job you expected?

In a perfect world, the contractor you hire will start and complete your project on time and within budget. There would be no surprises or problems, and everyone walks away happy with a job well-done.

When the job goes awry, you need to find the most effective way to settle the dispute. Here is what you need to do to prepare for resolution and the different options you have for reaching a (hopefully) satisfactory outcome.

Review Your Contract Carefully

The agreement you signed with your contractor should contain the requirements for:

  • Scope of work
  • Start date
  • Timeline to completion
  • What to do if you and the contractor do not agree on the schedule or quality of work

You should read your agreement carefully before you sign it. If you think the contractor is acting outside the contract, you need to review it closely so you can point to the contract clause you think is being violated.

Some common areas of dispute include:

  • Start date of project (when the contractor begins work)
  • Completion date of project
  • Who pays for materials
  • When the contractor is paid
    • Complete payment at beginning of work
    • Partial payment at beginning of work with balance due upon completion
    • In phases over lifetime of project

Sometimes the planned work changes during the course of the project. If so, then you and the contractor need to write down any required changes to complete the project and sign any contract modifications that result.

Speak to Your Contractor if Problems Arise

Often, you can simply speak directly to your contractor to settle any disputes or problems that may occur. With discussion and good will, you may be able to resolve the issue without losing time or creating additional expenses for legal procedures.

A discussion can resolve simple issues but what if the problem requires some form of legal help?

Out of Court Options

Don’t feel that litigation is your only option or even your first option. Litigation is expensive and can cause a huge loss of time while your project languishes. You have some options that cost much less than going to court.

State and Local Agencies

Your state contractor licensing agency or a trade group may have a resolution program for general contractor disputes. You may find these groups have a bias toward the contractor, but there are significant cost savings in using this option.

Mediation and Binding Arbitration

Both mediation and binding arbitration are non-adversarial or should be. Instead, you and your contractor, with the aid of a mediator or arbitrator, look for a mutually agreeable solution. You are not there to assign blame.

Since no record for appeal is required, any attorney or expert fees are reduced. Mediation and arbitration are particularly useful when the dispute is about a difficult-to-quantify problem such as constant rescheduling.

Costs vary depending on whether you are pursuing mediation or arbitration and according to local fees. Typically, you can expect to pay your share of $1,000 to $2,000 per day for these services; the contractor pays the other half.

  • Mediation

Mediation is often performed by a retired judge or a senior construction attorney who will hear the respective positions of both parties. Again, mediation is not to render judgment but to have a third party help you and the contractor understand each other’s point of view and facilitate a settlement. The opinion is non-binding for either party.

  • Binding arbitration

Binding arbitration, on the other hand, does render a binding opinion. However, neither you nor your contractor has the right of appeal. In binding arbitration a judge or attorney acts as the arbitrator, hearing both sides of the dispute. The arbitrator then renders a decision.

Vethan’s attorneys have extensive experience in mediation and arbitration. We have helped contractors and owners resolve their differences to mutual satisfaction on many occasions.

Going to Court

If mediation or arbitration did not work or has been refused by you or the contractor, you can try small claims court if the amount under dispute is small enough, usually up to around $5,000. The assumption is that you will not use an attorney, so the instructions you receive are easy to understand.

You can file in the county where the contractor operates, where you live, or where the project is based. The jurisdiction may be defined in the contract. Filing fees are about $50; additional fees may be incurred.

You need solid documentation and prep to show where you were harmed:

  • Copy of your contract; be prepared to point out the exact clause in dispute
  • Written records of timelines, photos of work, plans
  • Receipts for materials

If the amount in dispute is higher than that allowed by small claims court, you may need to head to civil court. This is where you really need an experienced Dallas business attorney in contractor litigation. Your attorney helps you navigate the process.


Litigation is substantially more costly in terms of time and money than the other options, but you and the contractor have the right to appeal the decision. However, that can hang your project in limbo for years.

A good contractor litigation attorney may be able to prevent that from happening. Talk to Vethan Law for help if you have been unable to resolve the dispute between yourself and your contractor.

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