The construction industry can be complicated, involving many different players (owners, developers, contractors, etc.) and a lot of money. With so many moving parts, it's common for disagreements to pop up. To avoid long delays or expensive lawsuits, it's important to handle these disputes in a an efficient way. One option is to use the American Arbitration Association (AAA), which offers various ways to resolve conflicts without going to court. 

Importance of Drafting Good Contract Clauses 

The first step in managing construction disputes is making sure your contracts are set up to address potential issues. AAA offers advice on how to draft dispute resolution clauses that are clear and effective. Having a well-written clause in your contract can save time and money by laying out exactly how any disputes should be handled before problems arise. 

AAA provides model clauses for arbitration, mediation, and other methods. Key things to think about when drafting a clause include: 

- Rule Set: Choose a set of rules that will make the arbitration process run smoothly. 

- Types of Disputes: Clearly state which types of issues will be handled through arbitration. 

- Joining Other Parties: Make sure the clause allows related parties to be included in the arbitration process if needed. 

- Number of Arbitrators: Decide if you’ll use one arbitrator or a panel, depending on the project’s complexity. 

- Venue and Law: Pick where the arbitration will take place and which laws will apply. 

By taking the time to draft a strong arbitration clause, you can help avoid confusion and delays later on. 

Streamlining Arbitration for Construction Disputes 

Even with the best planning, disputes can still happen. When they do, AAA offers ways to make arbitration faster and more affordable. One option is fast-track arbitration, which is designed for smaller-dollar disputes. It limits things like discovery (the process of gathering evidence) and the number of hearing days, which helps wrap issues up more quickly. 

Other tools that AAA offers include: 

- Consolidation and Joinder Rules: These rules allow multiple disputes involving the same project to be handled together, which simplifies the process. 

- Document-Only Arbitration: For disputes that don’t need witness testimony, this option helps save time by relying only on written evidence. 

AAA also has arbitrators who specialize in construction, so they understand the issues specific to the industry and can make informed decisions. 

Fixed Time and Cost Rules for Quicker Disputes 

For smaller to mid-sized disputes (typically claims up to $5 million), AAA’s Fixed Time and Cost (FTC) Rules offer a streamlined process with clear timelines and fixed fees. This means disputes are handled quickly, with set costs, so there’s no surprise at the end. These rules limit the back-and-forth over minor details and focus on solving the main issues, helping keep projects on track. 

Conclusion 

Handling construction disputes doesn't have to be time-consuming or expensive. By using the tools offered by the American Arbitration Association—like well-drafted contract clauses, fast-track arbitration, and fixed cost rules—construction professionals can resolve issues efficiently and keep their projects moving forward without major disruptions. 

Learn More about AAA and how they can help your small business here!