By Kushnick Pallaci PLLC | www.nyconstructionlaw.com
Introduction
New York construction projects are full of moving parts—tight deadlines, big budgets, multiple trades, and unexpected surprises. That’s why contracts are essential. But even the most carefully drafted construction agreement can’t guarantee smooth sailing. When things go wrong, disputes arise, and litigation can follow.
At Kushnick Pallaci PLLC, we’ve spent years litigating high-stakes construction contract disputes in New York. From non-payment claims and scope fights to termination battles and fraud allegations, we’ve seen it all. Here’s a look at the most common triggers for lawsuits—and how to protect yourself before the first shovel hits the ground.
Typical Triggers: Payment Issues, Scope Disputes, Termination
Litigation usually starts when one side feels they’ve been shortchanged. The most common triggers include:
1. Payment Problems
Unpaid invoices, withheld retainage, or disputes over extras often lead to claims. Contractors might file mechanics liens, and owners might withhold payment for alleged defects or delays.
2. Scope of Work Disputes
Misunderstandings over what work was included (and what wasn’t) can turn ugly fast. When a contractor believes they’re doing extra work without proper compensation—or an owner claims a contractor skipped something critical—litigation isn’t far behind.
3. Termination
Whether it's a wrongful termination by the owner or abandonment by the contractor, severing the relationship mid-project is one of the most combustible scenarios in construction. Often, both parties claim the other breached the contract first.
These disputes often arise in both commercial and residential settings—from Manhattan co-ops to Long Island retail developments.
Breach of Contract vs. Fraud Claims
Not all lawsuits are created equal. In New York, construction litigation generally falls into two buckets: breach of contract and fraud-based claims.
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Breach of Contract: The most common cause of action. It involves failure to perform a contractual duty—like not finishing on time, not paying, or using inferior materials.
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Fraud: A more serious claim that requires proof of intentional deception. This often arises when one party alleges the other misrepresented licensing status, construction experience, or project financing.
It’s worth noting: courts scrutinize fraud claims closely. Simply failing to deliver is not fraud. You need evidence of intentional misrepresentation, which is why we often defend against these claims aggressively.
At Kushnick Pallaci PLLC, we help clients distinguish between a breach and a viable fraud claim—so the case doesn’t get dismissed at the start.
Using Written Change Orders to Avoid Trouble
One of the biggest pitfalls in construction is the verbal change order.
Contractors perform extra work thinking they'll get paid. Owners approve changes in the field without formal documentation. Then when the final bill arrives, one side is shocked.
To avoid this, every construction contract should:
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Require written change orders
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Outline who has authority to approve them
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Specify the pricing method (fixed cost, time and materials, etc.)
When disputes do arise, the presence—or absence—of signed change orders can make or break your case. Courts in New York give significant weight to contractual documentation, especially when terms are clear.
Need a better contract? Start with our construction contract review services to minimize risk before problems start.
What to Include in Your Contract to Stay Protected
A solid contract won’t guarantee a problem-free project—but it will give you leverage when things go wrong. We recommend including:
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Clear scope of work with exhibits and plans
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Defined payment terms, milestones, and conditions for release
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Dispute resolution clauses (litigation vs. arbitration)
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Termination clauses explaining rights and procedures
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No oral modification clauses to protect against verbal promises
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Insurance and indemnity provisions tailored to project size and risk
If you're unsure about your contract’s enforceability, have Kushnick Pallaci PLLC review or draft it to ensure it's legally sound and customized to your goals.
How Kushnick Pallaci PLLC Litigates and Resolves Disputes
When a construction contract goes off the rails, we step in to:
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Review the contract and all supporting documents
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Evaluate defenses and counterclaims (e.g., breach, delay, fraud, unjust enrichment)
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Initiate or defend litigation in Supreme Court or federal court
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File or vacate mechanics liens tied to the dispute
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Engage in strategic settlement negotiations or mediation
Our litigation team has handled disputes from six-figure renovation contracts to multimillion-dollar commercial construction battles. We know the players, the law, and the tactics that get results.
Our goal? To resolve disputes efficiently—without letting legal fees eat up your project budget. Whether it’s a strong pre-litigation demand letter or a full-blown trial, we tailor our approach to the facts and your objectives.
Conclusion
Construction litigation in New York is complex, but it’s often avoidable. Clear contracts, careful documentation, and knowing your rights can prevent many disputes—or give you the upper hand when they arise.
If you're facing a construction contract dispute, don’t wait until you're buried in claims or liens. Let Kushnick Pallaci PLLC protect your investment, assert your rights, and move your project forward.
📞 Call Today: (631) 752-7100
📍 Visit Us: www.nyconstructionlaw.com
📧 Email: vtp@kushnicklaw.com
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