Did You Price the Dispute Into Your Tender?
Early this week, I ran a bilingual workshop called Before You Sign: Contract Risks That Become Payment Disputes. We spent an hour on scope, variations, notices, set-off, retentions and the special conditions that quietly move risk from one party to another.
At the beginning of the session, I shared a fun fact about me: "although I'm a dispute specialist, I don't like disputes. I don't like conflict at all." and it surprised many of the audience, and here's my reasons.
Every new dispute query makes my heart ache
People sometimes assume someone in my line of work must enjoy the fight. I don't.
Every time a new dispute enquiry lands in my inbox, my heart aches a little. It means another project, and another team of genuinely good people, is now suffering because of the good mahi they've done.
They have built something. They turned up early, solved problems on site, pushed the programme along and delivered the work. They should be proud of it. They should be feeling a sense of achievement and enjoying the rewards of their hard work.
Instead they're frustrated, out of pocket and feel punished for it.
When I trace these disputes back to where they started, it's very rarely about bad people or bad work. Far more often, the parties simply weren't well prepared at the dispute prevention stage. The scope was never clearly agreed. A notice went out after the deadline. A special condition was signed without anyone really reading it. None of that felt important at the time, and all of it matters now.
Same boat, now paddling against each other
What saddens me most is what happens to the relationship.
At the start of a project, everyone is in the same boat, paddling in the same direction. The client wants the building, the contractor wants to deliver it, the subcontractors want to do good work and get paid for it. Everyone is aiming for the same finish line.
Once a dispute starts, people quickly forget that. The same people who were solving problems together in the site meeting are now exchanging formal letters, blaming each other and building their cases. The boat is still the same boat. It just isn't going anywhere.
Non-payment is usually the final symptom, not the first problem.
By the time it shows up, the real problem has usually been sitting in the contract or the records for months.
We trust doctors more than dietitians
I understand why this happens. It's human nature to solve problems when they arrive, not before.
Just like we trust doctors more than dietitians. When something hurts, we go straight to the doctor and do whatever we're told. But if we'd listened to the dietitian earlier, we might have avoided the doctor's office altogether, along with the pain that brought us there.
Contracts work the same way. Dispute resolution is the doctor. Contract review, proper notices and good records are the dietitian. The dietitian's advice feels optional and a bit boring, right up until it doesn't.
I also understand the other part of human nature: the feeling that it won't happen to me. The programme looks achievable, the client seems reasonable and the relationship feels collaborative. So the plan, if there is one, is to deal with it if it ever comes.
I'm not here to tell anyone off for that. But I do want to ask one question.
Did you price the dispute into your tender?
When you put together your last tender price, did you include an allowance for dispute resolution?
I don't mean a general contingency. I mean the legal fees, expert fees, management time off the tools, the cash-flow gap while money is held up, and the months of stress.
Most people didn't. Hardly anyone does.
So if you didn't allow for dispute resolution costs in your tender price, I'd strongly suggest you take the prevention points seriously. You haven't priced the cure, so prevention is the only protection you've got.
Most disputes are decided before anyone picks up a tool
The most important slide in my recent workshop showed a simple point.
The earlier you act, the cheaper it is to fix.
Before signing, you have the most leverage and the lowest cost: you can change a clause, price a risk or walk away. During the job, getting notices, records and variations right on time still gives you real control. After a dispute starts, you have the least leverage and the highest cost, because lawyers, experts and adjudication take months.
These are the five contract points where most payment disputes really begin, each with the one question I'd ask before signing:
1. For scope and documents: Could I point to the page that proves this item is excluded?
2. For variations and authority: If this instruction is disputed, what document proves it was given?
3. For extensions of time and notices: Who receives notices, in what form, and by when?
4. For Payment, set-off and retentions: What can be deducted from my claim, and on what notice?
5. For special conditions: Is this a risk I can control, price or insure?
If you can't answer one of these questions for the contract on your desk right now, that's the clause to look at again before you sign.
The cheapest dispute resolution
I spend a lot of my working time helping people resolve disputes, and I'm proud of that work. When a dispute does happen, the right process, the right evidence and the right strategy make an enormous difference.
But if I could choose, I'd much rather meet you before the problem than after it.
Because the cheapest dispute resolution is having no dispute to resolve.
A good contract review won't remove every risk, and it isn't meant to. What it does is let you understand the risk, price it, negotiate it and manage it while you still have choices.
Where I can help
If my workshop session, or this article, has made you look twice at a contract, this is how I support contractors, subcontractors and project teams:
Contract risk review: a pre-signing review of the general and special conditions, with each risk ranked and practical recommendations you can act on.
Negotiation support: deciding which amendments to prioritise, preparing your negotiation positions and explaining the commercial consequences of each clause.
Payment and claims strategy: reviewing payment claims, payment schedules, variations, EOTs and records, and planning the right next step.
Dispute resolution: negotiation, mediation support and adjudication, with advice on the right pathway if prevention wasn't enough.
The best time to contact me is before tender or before signing, because that's when you have the most options.
Have a great weekend.
Emmolina
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Emmolina May is a Registered Quantity Surveyor, contract specialist, educator and dispute resolution practitioner based in New Zealand. She helps contractors, subcontractors and developers understand contractual risks, negotiate clearer terms and resolve disputes when they arise. Her focus is on helping construction businesses deal with risk before it becomes an expensive problem.
