Phone

Conflicts of Interest on Construction Projects Part 1

Proudly Serving Employers

Everyone involved in a construction project has a vested interest in seeing the project through to completion. However, when collaborating parties have conflicting goals, it often leads to an ugly dispute. In this two-part series, a Greensboro construction lawyer at Cotney Construction Law will be discussing conflicts of interest as they appear on private and public construction projects. If you believe that conflicting interests are putting your company at risk, consult with an experienced attorney at our Greensboro construction law firm.

What Is a Conflict of Interest?

A conflict of interest means that a person or party has concerns that do not coincide with an overall goal. Generally, a conflict of interest occurs on a construction project because owners and contractors have inherently different goals. It is in an owner’s best interest that a project is completed at the highest quality for the lowest cost. By contrast, a contractor would prefer to expend the least amount of resources necessary to complete a project in order to maximize their profits. Each side is attempting to transfer risk to the other party — a balancing act that is often a detriment to the success of a project.  

What Are Some Conflicts of Interest on Private Construction Projects?

Conflicts of interest between owners and contractors can develop in many ways. For example, an owner may attempt to take project management into their own hands and fail to adequately manage duties. On the other hand, a general contractor may attempt to delegate the majority of work to a subcontractor. Often an owner will insist on a lump sum contract that places an increased amount of risk on a contractor. In this scenario, a poorly estimated project scope can result in a contractor footing the bill.

How to Mitigate Conflicts of Interest on Private Projects

Being able to recognize and openly address conflicts of interest are crucial to a project’s success. However, the only way to be sure that everyone’s interests are protected is to get it in writing. Having a well-written contract and a well-defined scope of work is the only way to mitigate these kinds of disputes. Deciding where risks lie in advance will go a long way towards securing project completion regardless of the varying interests of biased parties involved. When drafting and reviewing contracts, always consult a Greensboro construction attorney at Cotney Construction Law.

To learn more about conflicts of interest in construction, read part two.

If you would like to speak with an attorney at our Greensboro construction law firm, please contact us today.

Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.