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How Can I Minimize Risk of Construction Litigation For My Company?

Construction in progress

As more than one construction contractor has learned, the complex nature of construction projects means that litigation can arise at any stage. Examples of litigation matters include:

  • Contract disputes
  • Issues with building code compliance
  • Construction defects
  • Problems with insurance coverage

All of the above are key areas of risk that can lead to prolonged, expensive legal battles. While it is impossible to eliminate all potential risks, contractors can take proactive measures to minimize their exposure and to improve their odds of prevailing should a lawsuit materialize. Understanding the key areas that tend to spark litigation can help inform contractors of the best strategies to protect their business and find successful resolutions for legal disputes.

Factors Contractors Should Consider

What a contractor does before disputes crop up, or before they rise to the level where a lawsuit is filed, can make a profound difference in how those disputes are ultimately resolved. Here are some key factors for contractors in California to keep in mind:

ContractsHaving a clear, comprehensive contract in place prior to starting any construction project is essential. In fact, California law mandates the elements that a construction contract must contain, including the scope of work, project timeline, payment terms, and the mechanism by which any disputes will be resolved. Having an experienced construction attorney draft your contract will ensure that no detail is overlooked and that your contract complies with all applicable legal requirements. Also if you are provided a contract from a large company, a proper review of the important legal terms, can help you understand the legal ramifications and possibly save you thousands of dollars in legal costs.
DocumentationKeeping proper records throughout a construction project is another best practice for mitigating risk. Progress reports, communication logs, and written change orders for any adjustment to the original scope of work can provide evidence to support a contractor’s position and strengthen their defense in the event of a dispute. Also, taking progress photos is a great way to document what was done, and the state it was in, during the construction.
ComplianceIt is the contractor’s responsibility to adhere to California’s notoriously strict building codes and regulations throughout a construction project. Therefore, they should stay informed about the requirements of current building codes and verify that all regulatory standards are met. Instituting quality control measures and undergoing regular inspections can help identify any compliance issues so they can be addressed promptly. The consequences of failing to meet requirements can include project delays, fines, and lawsuits, a potentially disastrous and expensive outcome for the contractor.
Construction Defect ClaimsContractors can be held liable for defects occurring during construction or up to ten years after a project is completed. Design flaws, poor workmanship, and material defects are among the issues that can prompt a construction defect claim, a relatively common source of dispute in the construction industry. Contractors should promptly address alleged defects and enlist the aid of experienced legal counsel in investigating the claims against them, assessing their liability, and defending them against legal action.
Insurance Having the proper types of insurance in adequate coverage amounts is vital for providing protection against potential liability and legal claims. Essential policies include general liability insurance, professional liability insurance ( when design is involved), and builder’s risk insurance. A contractor should understand the terms and coverage limits of their insurance policies to ensure they provide necessary protection in litigation. If a claim should arise, it is essential to immediately notify the insurance carrier and cooperate fully with their investigation; this can help maximize insurance coverage and reduce out-of-pocket expenses. In addition, the date they notify the insurance company triggers the insurance company’s duty to provide defense to the contractor. So it is essential to inform the insurance company of any claims at the earliest time possible.
A legal guide for contractors in California, By Ghassemian Law Group

Protecting Your Construction Firm in Southern California

No contractor wants litigation to destroy their business. Careful planning can ensure that your construction firm is protected and prepared when disputes arise. The experienced construction law attorneys at Ghassemian Law Group are your ideal resource for not only mitigating risk before legal troubles begin, but also fighting for you when a dispute is unavoidable.

As a boutique law firm specializing in construction, real estate, and business law, we pride ourselves on delivering responsive service backed by large-firm expertise. We can help you with individualized contracts and agreements that safeguard your rights, while our seasoned litigators are prepared to provide vigorous representation in mediation or in court when needed. Our goal is always to chart the most efficient path to a successful resolution to preserve your livelihood and end your legal woes. To learn more about how the construction law experts at Ghassemian Law Group can help you, contact us here today.


This article is informational only and meant to provide guidance. It is not meant to be legal advice and it does not create an attorney-client relationship. For what to do in your specific situation, please consult with a qualified Construction Law attorney.


Ghassemian Law provided thoroughly constructed and effective legal strategies for successful outcomes in the complex world of construction law for our small company. Core competence, due diligence, and a commitment to client needs are strengths that inspire confidence and keep producing results when it counts most.

Peter Greenberger

Pacwest Construction and Development Inc

Mahyar and her team possess a wealth of construction and business law expertise. Expertise to both guide a client away from litigation and, if not possible, to skillfully represent them in court.

Thierry Montoya

AlvaradoSmith APC

Mahyar Ghassemian and her firm are the best construction dispute litigators and negotiators in the industry. Mahyar is an expert in this area. Her firms knows the law and are very tenacious in obtaining the best results for their clients. I have been involved in very lengthy litigation as co-counsel in a very big case and jury trial. Mahyar is one of the hardest working and most effective advocates I have ever had the privilege of working with.

Paul Hoffman

Hoffman Legal Corporation

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