There is no running away from the fact that we live in a highly litigious society, and there is no question that having to file a construction lawsuit to enforce your rights or being brought into a lawsuit to defend yourself is at best an expensive proposition and at worst a gut wrenching experience. Even if you are able to adequately recover your litigation costs, the process of dealing with construction disputes is both long and emotionally draining, sure to challenge your patience and test your will. It is believed that you have a 1 in 4 chance of having a potentially devastating lawsuit filed against you sometime in your future.
Accepting the threat of litigation in your future is the first step; understanding how to best resolve any dispute which arises is the more difficult next step. Always know that somewhere, likely buried in the positions put forth by the opposing parties, lies a resolution, where each party compromises its demand just enough to eliminate the necessity of a costly judicial action. Finding that place where a settlement can be reached and where the respective parties can agree to accept something less than what they hoped to achieve isn’t always easy, but it is possible.
However, resolving a controversy without entering into a proper settlement agreement is tantamount to leading a horse to water and not letting it drink. Settlement agreements are interpreted and governed by the law of contracts. It is therefore critical that the parties not only reach an agreement conceptually but also sign a document which is clear, concise and lists the actual terms of the settlement. This will demonstrate that the parties have mutually agreed upon the essential elements of their resolution. While uncertainty as to nonessential terms or small items will not preclude a settlement agreement from being enforced, an inability to show that the parties had a meeting of the minds on resolving their construction disputes could be fatal to actually making a compromise stick.
Settlement agreements are highly favored by judges as a means of conserving judicial resources, and therefore courts will enforce them when possible. Parties will do themselves a favor in making sure that any settlement they reach is one which is reduced to a written document and signed. Case after case has been unnecessarily litigated because the parties never got around to formalizing their settlement. Courts are reluctant to enforce what one party only thought the other party agreed to. It is bad enough to find yourself in the middle of a dispute; it is ever so much worse to think you have settled a controversy and then be hauled into court because the deal was never actually formalized or signed. Remember to always ink the deal.