In Michigan the construction industry is one of the most regulated and high-risk industries, with legal disputes typically arising from contract disagreements, project delays, and/or safety violations. Whether you’re a contractor, developer, or property owner, understanding the some common causes of construction lawsuits and how to help mitigate legal risks is essential for protecting your business and investments is important.
Common Types of Construction Lawsuits:
Breach of Contract Disputes
Contracts define project scope, payment terms, and deadlines. When one party fails to meet obligations, disputes arise.
Common Breach of Contract Issues:
Non-payment for completed work
Missed project deadlines
Use of substandard materials or poor workmanship
Unapproved changes to project scope
Mechanic’s Liens and Payment Disputes
A mechanic’s lien is a legal claim used by contractors, subcontractors, or suppliers who have not been paid for their work.
Key Payment Dispute Triggers:
Contractors withholding payment from subcontractors
Owners refusing to pay due to project delays or quality concerns
Disputes over contract terms regarding payment schedules
Construction Defect Claims
Construction defects can result in serious financial losses and legal claims from property owners. These defects fall into four main categories:
Design Defects – Architectural or engineering flaws that affect structural integrity
Material Defects – Use of faulty or inadequate building materials
Workmanship Defects – Poor construction techniques leading to failures
Subsurface Defects – Soil instability or foundation issues due to poor site preparation
Contractors can face liability even years after a project is completed, making proper documentation and adherence to industry standards essential.
How Contractors/Owners Can Protect Themselves
While lawsuits are sometimes unavoidable, contractors and owners can take proactive steps to minimize legal risks:
Draft Robust Contracts – Ensure payment terms, deadlines, and dispute resolution clauses are clear.
Document Everything – Keep records of contracts, emails, invoices, and site progress.
Follow Safety Regulations – Maintain compliance with OSHA and MIOSHA standards to reduce liability.
Communicate Clearly – Regular updates with project stakeholders can prevent disputes.
Consult Legal Counsel Early – Address potential legal issues before they escalate into lawsuits.