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How can business owners navigate a general contractor dispute?

On Behalf of | Apr 21, 2023 | Business Law |

Businesses frequently hire general contractors to do repairs, installations and other work for them. But what recourse do they have if the contractor fails to follow through on the promised work, or if damage occurs? A dispute with a general contractor is never ideal, but there are a few answers to resolve the situation.

  • Mediation: This option involves meeting with a neutral third party to discuss the dispute and come to some agreement on a resolution. The mediator will likely be a retired judge or a litigator in a relevant field (construction, for example). The mediator will help both parties to understand each other’s perspectives and work through a settlement.
  • Binding arbitration: This is like mediation, except that the third-party expert is empowered to render a judgment in the end. The judgment is binding and there is no appeal option.
  • Small claims court: this may be a good option in situations where there is a small amount of money at stake (typically $3,000 to $5,000). Claimants must pay filing costs and then go through the process in their area

There are a few reasons the above options may not be possible; for example, if the disputed amount exceeds the small claims maximum, or if mediation and binding arbitration are not of interest to one of the parties. In these situations, civil court may be the best avenue for resolving a Michigan contractor dispute. Finding a lawyer is an important first step for those who are considering filing a civil claim against a contractor, or alternatively, contractors who seek to file a lawsuit against a customer.


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