A deep learning algorithm parses through dense, voluminous data lakes stored in a company’s digital systems, flagging legally troublesome language to curb potential lawsuits.
According to Arcadis’s Global Construction Disputes Report, the single greatest cause for disputes and claims is a human misunderstanding of contractual obligations, with these disagreeable incidents occurring 75 percent of the time between project managers and engineers.
Considering the recurring nature of disputes—almost a normalized facet of the industry—calls for a serious overhaul in contract administration, particularly when construction companies fail to achieve better outcomes through the more amiable approach of negotiating.
Old habits die hard in an industry that’s still struggling to reform manual documentation. Droves of files stored in thick binders carrying contractual documents and project-based sheets have known to obscure communication across project teams, especially the ones responsible to ensure compliance with code and regulations.
Much to the relief of project managers and clients, tech startups are stepping up to the plate with “deep learning” algorithms that scan large e-mail and digital documentation to flag legally contentious language in message fields and attachments, which may bring about a federal lawsuit.
The company, Intraspexion, has built the app with an aim to equip businesses with legal risk prevention tactics, by reading through past litigation cases and pre-empting similar claims in ongoing and upcoming projects to serve early warnings of objectionable activities.
The deep learning engine, according to the company, intelligently catches categorized text from settled lawsuits to pattern match it with the text part of the corporate email databases and documentation. Of the thousands of files perused, only those needing human attention are pulled for further scrutiny, amplifying the legal team’s foresight into future downsides of pursuing a certain course of action or contractual obligation.
Catching Legal Risks Through Smart Detection
The deep learning machine looks for traces of product liability claims as well.
If an equipment breakdown led to a worker sustaining a severe injury, it can be reported back as the site engineer’s negligence toward machine upkeep.
Concurrent damage to the product may occur, in which case, specialist engineers can be called to investigate the incident. If such liability, for any reason, is shirked it can spell doom for a company by derailing both commitments and schedules. Deep learning algorithms would alert project managers of these discrepancies and missed opportunities to avert legal risks through its multi-layered neural network.
Becoming context-aware by examining post-incident reports lends this software a unique edge that’ll soon turn indispensable for construction companies to detect and mitigate defects. Procore Technologies points out the four common clauses in construction contracts that hold the most potential for reputation-damaging legal action.
Remembering Construction Risks
Projects are prone to unexpected risks disrupting the normal course of events.
Human predictions of when and how these risks would occur and shape outcomes can’t be relied upon if companies want to survive in today’s market.
With the flurry of activity that takes off once a project is signed off, project managers and engineers can’t for the life in the match past risks encountered in ongoing project processes. This is why an algorithm that pattern matches risk-ridden language and activity can quickly avert them rather than spending time on expensive investigations that might lead nowhere.
Intraspexion owns patents to 120 claims and can run its algorithm to catch project risks like contract drafting risks, product defects, medical risks, and other general risks. Disputes emerge from contracts poorly drafted, insufficient legal understanding of obligations, and inappropriately filing of claims.
Ultimately it forces project teams to put a precious time to understand the full scope of contract’s legal implications which when discussed with attorneys almost certainly cause litigation suits the client and vice versa. Getting disputes resolved through litigation is costly, time-consuming, and is warped in complex legal loopholes that usually take an enormous chunk of time and resources, halting project progress.
Preventing Construction Lawsuit Cases
Aside from using deep learning algorithms, construction project owners and managers need to invest in upfront project planning.
- Ensure schedules are achievable within contract terms
- Prepare daily reports for any defects during implementation
- Ensure everyone has the same understanding of the contract to avoid litigation
- Handle issues proactively without dismissing worker concerns
- Maintain regular communication through email and digital mediums
- Stay clear of dangers, delays, quality slips, and design errors
- Consult a construction risk specialist for specific trades and jobs
- Keep in-person contact for critical problems
- Fulfill duties to meet contractual obligations
- Enhance transparency in communication through technology among project parties
A key component of construction contracts is drafting a comprehensive and clear warranty clause. Let’s look into how they’re dealt with.
Construction Warranties Avert Avoidable Legal Risks
Most construction contracts include an implied and explicit warranty. The implied warranty covers for the accuracy and wholesomeness of design specifications and construction plans while explicit warranty provides proof of funds. Here’s a handy list of warranties that a contractor can either express or imply to the project owner.
● Explicit Warranties
▪ Design-Build Warranties
▪ Construction Services Warranty
▪ Subcontractor Warranties
▪ Repair Warranties
● Implied Warranties
▪ Competent Workmanship
▪ Vendor Background Checks
Warranties protect contractors from being held liable for unexpected circumstances affecting project integrity and continuity. There’s insurance safeguarding the interests of the owner while the contractor agrees to fulfill their duties to implement the project workflow as promised. Failure in carrying out primary goals makes a strong case for litigation and disputes that may constitute a breach of contract.
Use this handy checklist to eliminate risks and arbitrary claims that warranty obligation doesn’t exist when they do.
- Parties to the contract must identify and notify unusual developments that may affect warranty liability
- Parties to the contract must review the contract closely to attach a common legal base for a maximum and minimum for callback warranties without a durational aspect
- Parties to the contract must not treat warranty provisions as independent to payment, time and other negotiated provisions
- Parties to the contract should be cautious of inconsistent warranty provisions between the subcontracts and primary contract
- Parties must fully understand and agree on the nature of construction services
- Parties must be fully aware of legal implications governing the project based on where they’re located and form a joint strategy to negotiate around prevailing jurisdiction’s laws
Satisfying the business and human factor of construction projects is a tricky bargain but can single-handedly erase the majority of the disputes in the construction industry.
The complexities lurking in contract administration can only be dealt with adequate training to ensure that parties go into business with their eyes wide open. They wouldn’t reckon what they’re liable for if they don’t recognize what’s required of them under their contracts.
Spiraling them down an inadequate project management system, inadequate contract drafting will cause disputes where they shouldn’t have been and lead to excessively strained business relationships stirring career-terminating lawsuits.
Less haphazard acceptance of contracts and more critical thinking into creating them should be the way forward, but more economic uncertainty is making that less plausible.