Common Causes of Construction Litigation and How to Avoid Them

lawyer and client is working with documents

Construction projects in California, whether residential, commercial, or public, often involve complex contracts, tight deadlines, and multiple stakeholders. When disputes arise, they can quickly escalate into costly litigation. Understanding the most common causes of construction lawsuits in California and how to proactively avoid them is essential for contractors, developers, property owners, and design professionals.

At Plumtree & Brunner, LLP, our California construction lawyers are proactive in helping you avoid litigation whenever possible. We also have the experience and strength to litigate when you need it. Let us work with you to avoid litigation through effective contract drafting and construction tips.    

Common Causes of Construction Litigation in California

Construction litigation typically arises from one or more of the following issues:

1. Construction Defects

Under California Civil Code § 896 (part of the Right to Repair Act), property owners may sue for defects in new residential construction. Defects may include:

  • Structural failures
  • Water intrusion
  • Electrical or plumbing issues
  • Code violations

Claims often involve allegations of negligence, breach of warranty, or strict liability. Builders must respond promptly to defect notices and follow statutory repair procedures to avoid litigation.

2. Contract Disputes

Poorly drafted or ambiguous contracts are a leading cause of construction lawsuits. Common disputes include:

  • Scope of work disagreements
  • Change order conflicts
  • Payment terms and delays
  • Termination clauses

California courts enforce written construction contracts strictly, and failure to comply with licensing or payment laws can invalidate claims or defenses.

3. Payment Issues

Nonpayment or delayed payment can trigger mechanic’s liens, stop notices, and breach of contract claims. Under California’s Prompt Payment Act, contractors and subcontractors are entitled to timely payment once work is completed.

Disputes may arise over:

  • Retainage
  • Incomplete or defective work
  • Disputed invoices
  • Owner insolvency

4. Delays and Scheduling Conflicts

Project delays can lead to claims for liquidated damages, lost profits, or breach of contract. Causes include:

  • Unforeseen site conditions
  • Weather events
  • Labor shortages
  • Design errors

California courts assess whether delays were excusable, compensable, or caused by one party’s breach.

5. Worksite Injuries and Safety Violations

Construction sites pose significant safety risks. If a worker is injured due to unsafe conditions, litigation may follow, especially if OSHA violations or third-party negligence are involved.

While workers’ compensation may cover employee injuries, property owners and contractors may face personal injury lawsuits from non-employees or subcontractors.

How to Avoid Construction Litigation in California

Proactive planning and legal compliance are key to avoiding disputes. Consider the following strategies:

1. Use Clear, Comprehensive Contracts

Ensure all construction contracts:

  • Define scope, schedule, and payment terms
  • Include dispute resolution clauses (e.g., mediation or arbitration)
  • Comply with California licensing and consumer protection laws
  • Address change orders and termination procedures

Legal review of contracts before signing can prevent future misunderstandings.

2. Document Everything

Maintain detailed records of:

  • Communications with clients, subcontractors, and suppliers
  • Site inspections and progress reports
  • Change orders and approvals
  • Payments and invoices

Documentation helps defend against claims and supports lien enforcement if needed.

3. Comply with Building Codes and Safety Standards

Follow all applicable:

  • California Building Code requirements
  • OSHA regulations
  • Local permitting and inspection rules

Regular site audits and safety training reduce the risk of defects and injuries.

4. Resolve Disputes Early

Address complaints promptly through informal negotiation or mediation. California courts often favor alternative dispute resolution (ADR) to reduce litigation costs and delays. Including ADR clauses in contracts can encourage early resolution and avoid court involvement.

Man signing a document

5. Consult Legal Counsel

Engage a California construction attorney to:

  • Review contracts and compliance issues
  • Respond to defect notices under the Right to Repair Act
  • Defend against mechanic’s lien challenges
  • Represent you in mediation, arbitration, or litigation

Legal guidance is especially critical for high-value projects or disputes involving multiple parties.

Avoid Litigation with Strategies from a California Construction Attorney

Whether you are a contractor, developer, or property owner, working with experienced legal professionals and implementing sound project management practices can help you avoid costly lawsuits and keep your construction project on track.Our team at Plumtree & Bruner, LLP helps you be proactive in avoiding costly litigation. Contact us today for a consultation.