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Building Disputes

The Irish property market has slowed if not stopped. According to the Irish Times the construction sector owes €100 billion to Irish banks.

In these circumstances there will be considerable pressure to avoid making due payment on contracts, not to speak of an inability to absorb the cost of contractors’ or developers’ errors.

In short, the frequency of disputes in the sector is sure to rise.

At the retail level they will not get to the level of the scandal in Spain, where the Guardian reported:

Britons are being scared off buying property on Spain’s Mediterranean coast, with the number of potential buyers plummeting after a series of corruption and planning scandals and the announcement of plans to demolish thousands of illegally built homes.â€?

They will, however, get to the level where subsidiary agreements will appear and misunderstandings will grow.

The standard source of building agreements in Ireland is the suite of contracts devised by the Royal Institute of Architects in Ireland, some of which are listed HERE.

In the UK the standard source of building agreements is the suite of contracts devised by the Joint Contracts Tribunal Ltd. listed and downloadable HERE.

For Irish sub-contractors (nominated) the Construction Industry Federation form is used.

What happens when the disputes break out? That depends on the form of contract and indeed, the terms of the contract.

Many parties to these disputes fail to understand that the dispute is a legal dispute and that the terms of the agreement will, in principle, if not in practice, dictate the outcome of the dispute. In short, the contract is the source of the parties’ rights and obligations and the dispute will consist of teasing out the point on which one of the parties failed in its legal obligations, as defined by the contract/s.

This is not to say that parties can and do settle disputes on a practical basis, rather than a legal basis.

When this happens the experience can resemble THERAPY rather than law.

It is important to recognize that the expense of construction (which is considerable) carries the hidden reciprocal cost of the dispute and that the parties should budget for spending that money if and when the dispute breaks out. If that is budgeted for there will be a minimized loss of momentum in driving the dispute resolution process to an early conclusion.