4 Construction Law Trends In The Age Of Supply Chain Issues

The life of a construction lawyer has become more interesting in the last few years thanks to global supply chain issues. New buildings have lots of inputs, especially steel, copper, and lumber. A disruption on any of these fronts could turn a project into a mess. 

With many supply chains feeding the process, construction companies and their clients have to be sensitive to some of the legal problems that can appear. If you're planning a project, a construction attorney will tell you to pay attention to these four trends.

Cost Volatility

Input prices have experienced significant ups and downs in recent years, and suppliers are not wild about offering prices more than a couple of weeks out. This can make decisions involving costs tough because contractors need to protect themselves against major upward shifts in prices. Customers also want to know that they can be confident when they contractually lock in expenses.

Fuel has also become a major problem. Suppliers are often applying surcharges, and these can create cost overruns on projects. Contractors and clients need to be clear about how surcharges will fit into their agreements.

Delays

Even one supply issue can cause a cascade of problems on a construction project. At the same time, most customers want to know their projects will wrap up within a contractually-proscribed period. Contractors may build more time into their deals to account for potential delays. However, a construction lawyer will encourage both sides to add clauses addressing potential delays. Otherwise, the alternative may the invocation of force majeure and a whole slew of legal issues.

Breach of Contract

Unsurprisingly, these issues can drive breaches of contracts. If a delay drags on too long, for example, the customer will eventually have to hold the contractor in breach.

Similarly, customers may be tempted to walk away from projects as costs and timelines fluctuate undesirably. The same problem occurs, though, because that's also a breach.

A well-written construction contract should be clear about what might count as a breach. It should also offer dispute resolution mechanisms.

Substitutions

One of the most common solutions in a supply-constrained environment is to make substitutions. This can be good for speeding up projects, but it can create a host of problems. If a supplier offers the wrong material for a structure element, for example, it could lead to engineering problems. Whenever substitutions become necessary, the contract should account for keeping the changes within the architectural and engineering specs.

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