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General contractors and subcontractors can resolve most project conflicts more safely by starting with the signed subcontract, identifying the exact disputed issue, documenting it, and following the contract’s notice and escalation procedure. Raise the matter promptly with authorized project representatives; if they cannot agree, use the next step the agreement requires. This U.S.-oriented guide explains a practical process, but the actual deadlines, payment rights, and remedies depend on the contract and project jurisdiction.
What should you do first when a GC and subcontractor disagree?
Start with the executed subcontract and the documents it incorporates—not an assumption about what is customary. The agreement may specify who can issue directions, how changes must be authorized, when a claim must be noticed, whether work must continue while a claim is pending, and whether the parties must mediate or arbitrate before going to court. AIA Contract Documents likewise directs parties to the agreement or general conditions for applicable claim and dispute procedures.
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- The signed subcontract, exhibits, scope sheet, and any incorporated prime contract or general conditions.
- Current drawings and specifications, approved schedules, and relevant revisions.
- Change directives, proposed and approved change orders, RFIs, submittals, and written instructions.
- Payment applications, invoices, notices, correspondence, daily reports, and meeting minutes.
- The clauses on changes, claims, notices, payment, schedule impacts, dispute resolution, and continued performance.
Check which people are authorized to give direction, approve a change, or settle a claim. A field conversation may help solve a problem, but it may not satisfy a written-notice requirement or give the speaker authority to change the agreement. If the subcontract incorporates provisions from the prime contract, identify which provisions apply and whether the subcontract adds its own requirements. For a project-specific claim, the documents and applicable law—not a generic checklist—control.
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How do you define the dispute clearly?
Separate the disputed decision from the broader working relationship. State what happened, what each side understands the contract to require, what decision is needed, and the practical effect on cost, time, quality, or safety. Common flashpoints include the boundary of the subcontract scope, whether an instruction is extra work, change-order price or time, payment, performance, and delay.
A concise issue statement is more useful than a general accusation. For example: “The site instruction dated [date] asks our crew to install [work]. We read the subcontract scope as excluding it. Please confirm whether this is a change, identify the authorization and pricing process, and advise how to proceed without affecting the schedule.” This approach does not concede entitlement; it makes the question answerable.
Keep separate issues separate. A payment disagreement, a disputed change, and a quality concern may involve different clauses, records, decision-makers, and notice periods. Combining them into a single broad complaint can make it harder to see which facts are agreed, what remedy is requested, and which contractual step applies.
How should the parties raise the issue?
Raise it promptly with the authorized project representatives and use the notice method and recipient stated in the contract. A short meeting can clarify facts and identify a workable interim plan, but follow up in writing if the agreement requires written notice or if the conversation leaves a material issue unresolved.
The joint AGC, American Subcontractors Association, and Associated Specialty Contractors guidelines recommend that on-the-job relationships be handled between authorized representatives. They also advise moving unresolved site problems to home-office personnel without disrupting the job. That is practical guidance, not a replacement for the procedure or deadlines in a particular subcontract.
- Send a focused request. Identify the event or instruction, the contract provision or scope language at issue, the decision you need, and any schedule or cost consequence known so far.
- Ask for a prompt project-level discussion. Invite the people who can explain the work and the people authorized to make the relevant decision.
- Confirm what was agreed. Record the next action, owner, and date. If there is no agreement, state the unresolved points neutrally and preserve any required formal notice.
- Escalate through the named contacts. If the site representatives cannot resolve it, use the contract’s senior-management or home-office step rather than relying on an informal appeal.
Some ConsensusDocs dispute provisions use a tiered process. AGC describes an approach in which parties talk at the project level within five days after a dispute arises and then, if it remains unresolved, discuss it at the senior project level. That five-day timing describes that approach; it is not a universal deadline. Read the actual clause to determine whether it applies, how a “dispute” is defined, and what notice or response period the parties agreed to.
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What should you document during a construction dispute?
Keep a dated, organized record that connects the disputed event to the contract, work performed, cost, and schedule. Good records help the parties evaluate the issue and preserve information for any later negotiation, mediation, arbitration, or court process. They do not, by themselves, satisfy a formal claim notice or prove a legal entitlement.
- Direction and scope: Save the instruction, RFI response, drawing revision, specification, meeting note, or email that prompted the work. Note who issued it and when.
- Work and conditions: Keep relevant daily reports, photographs, delivery records, inspection notes, and records of labor or equipment assigned to the disputed work.
- Cost: Track labor, materials, equipment, and other claimed costs in a way that distinguishes the disputed work from the base scope. Retain supporting records rather than relying only on a later estimate.
- Time and sequence: Preserve schedule updates and contemporaneous notes showing when the event occurred, what activity it affected, and what mitigation or resequencing was considered. Do not state a schedule impact as established if it is still being evaluated.
- Payment and notices: Keep payment applications, invoices, responses, proof of delivery, and copies of notices sent under the contract.
- Decisions: After meetings, circulate a brief factual summary: attendees, points agreed, open questions, assigned actions, and dates. Correct errors promptly and retain the original correspondence.
Use the contract’s notice addresses, recipients, delivery methods, and time limits. A message to a superintendent may not be equivalent to notice to the person or office identified in the agreement. Because the available data does not establish a universal notice period or method, do not borrow one from another project’s form or assume that ordinary email is sufficient.
What if the disagreement is about extra work or a change order?
Determine whether the direction changes the agreed scope, then follow the subcontract’s notice and change-authorization process. The ABA’s overview of change orders identifies scope, price, and time as core points the parties need to address. The joint industry guidelines recommend signed work authorization before work for another contractor or subcontractor.
Before treating a field instruction as an agreed change, check the agreement for who may authorize it and what written form is required. A useful change record should identify the work being added, deleted, or revised and address the requested price and any schedule adjustment. If price or time cannot yet be quantified, state what is known, what remains under evaluation, and what information is needed; do not present an estimate as an agreed amount.
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Does the owner’s approval determine whether the subcontractor gets paid? Not necessarily; the subcontract’s terms and applicable law govern the parties’ obligations. Review any owner-approval condition, flow-down provision, payment clause, and change procedure before assuming either that owner approval guarantees payment or that its absence defeats a subcontract claim. The available general guidance cannot determine the result for a particular project.
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Can a subcontractor stop work during a payment or change dispute?
Do not assume that a payment dispute automatically permits a subcontractor to suspend work, or that a contractor can always require continued performance. The applicable subcontract and law determine the parties’ rights. Some construction clauses require performance while a claim is pending, but that practice is not a universal rule.
Before stopping work, withholding payment, terminating, or taking another step that could affect the project, review the exact clause and get advice from a construction lawyer in the project jurisdiction. Check for required notice, cure periods, payment procedures, and any contractual direction about continuing performance. If the work raises an immediate safety concern, address that concern through the project’s safety process; do not treat a safety issue as merely a bargaining point.
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Where appropriate, the parties can discuss a temporary written plan while the merits are reviewed—for example, identifying what work will continue, what information is being exchanged, and who will make the next decision. Any interim plan should be approved by people with authority and should not inadvertently waive a claim or contradict the subcontract.
Which dispute-resolution step comes next?
Follow the sequence in the dispute clause. Negotiation is often the first step; unresolved matters may then go to senior representatives, mediation, arbitration, or litigation, depending on the agreement and applicable law. The Federal Transit Administration’s January 2025 project-management guidelines describe negotiation as the most common claims-resolution method and characterize it as cost-effective and relatively quick. That is general process guidance, not a prediction about the cost or outcome of an individual dispute.
| Step | What it does | What to check |
|---|---|---|
| Project-level negotiation | Authorized representatives discuss the issue directly and may agree on scope, cost, time, or an interim plan. | Whether the contract requires this step; who has authority; and any response deadline. |
| Senior-level escalation | Moves an unresolved issue to managers or home-office personnel with broader authority. | Named contacts, required notice, response period, and whether work continues during review. |
| Mediation | A neutral assists the parties in seeking a settlement; mediation is generally nonbinding unless the parties reach an agreement. | Whether it is a required prerequisite, which administrator or rules apply, and how fees are allocated. |
| Arbitration | A private adjudicative process that can produce a binding award when agreed and enforceable. | Whether the clause applies, the rules and administrator, costs, timing, discovery, arbitrator selection, and review rights. |
| Litigation | A claim is brought in court where the contract and law permit. | Any arbitration requirement, the appropriate court, deadlines, costs, and available remedies under local law. |
The AIA explains that a project agreement or general conditions may describe how claims must be made and how disputes are resolved. Read the clause for the exact sequence: mediation may be required before arbitration or litigation, while another agreement may use a different process. Do not assume that simply requesting a meeting preserves a claim if a separate notice or filing deadline applies.
If the agreement selects arbitration, review the named rules, administrator, time limits, fees, and arbitrator-selection process before filing. The American Arbitration Association’s construction page describes Fast Track Procedures for two-party cases where claims or counterclaims do not exceed $150,000. Procedures and thresholds can change, so confirm the current rules and the clause’s applicability rather than assuming every construction arbitration qualifies.
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How can the parties protect the project while the dispute is pending?
Keep the project moving where the contract, safety, and practical conditions allow, while preserving each party’s position in writing. FTA guidance recommends procedures that allow work to continue during dispute review when appropriate, and some standard construction clauses require continued performance. Whether that obligation applies here must be determined from the actual agreement and law.
At a project meeting, identify any unaffected work that can proceed, information needed to evaluate the claim, and a date for the next decision. If a proposed workaround changes scope, cost, sequence, or responsibility, document it and obtain the required authorization. Avoid an ambiguous “keep going” instruction that leaves both sides later disputing what work was directed or whether it was included in the original price.
Project continuity does not require a party to abandon a claim. Equally, continuing work should not be assumed to waive an objection, preserve a deadline, or create an agreed price. Use the contract’s notice process and seek project-specific legal advice when a step could affect payment, a claim, or the right to continue or suspend work.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.When should you involve a construction lawyer?
Get jurisdiction-specific advice before a high-stakes or potentially irreversible step: withholding payment, suspending work, terminating, filing a lien or bond claim, signing a release, or allowing a deadline to pass. The available general sources cannot establish an individual project’s notice deadline, payment entitlement, lien or bond remedy, right to suspend, or arbitration enforceability. Those questions turn on the signed documents, project type, and law where the project is located.
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For an initial legal review, organize the executed agreements and amendments, the disputed direction, notices and delivery proof, relevant schedule and cost records, payment history, and the clause that sets the dispute process. Ask counsel to identify the immediate deadlines and required notices first, then evaluate the merits and available resolution options. AIA’s general guidance is not legal advice for a specific dispute.
How can you reduce the chance of another conflict?
Prevention begins before a dispute arises. At subcontract award, clarify the scope boundary, included and excluded work, document hierarchy, who may issue changes, how notice must be delivered, and how disputes escalate. The ABA’s discussion of prime and subcontract clauses is a useful reminder that terms governing changes and claims should be understood in the context of the contract documents, not left to assumptions after work begins.
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- Use a clear scope and identify drawings, specifications, and schedule versions that define the work.
- Identify authorized representatives and the formal channels for instructions, changes, notices, and approvals.
- Agree how proposed changes will be recorded, priced, and evaluated for time impact.
- Set a regular way to document open issues and decisions, especially where they affect sequencing or other trades.
- Read the dispute clause before a disagreement occurs, including any escalation, mediation, arbitration, or continued-performance language.
These steps cannot eliminate every disagreement, but they make it easier to distinguish a scope question from a change, a claim from an informal complaint, and a project-level issue from one that needs formal escalation.
Frequently Asked Questions
How do I prove that a GC directed extra work?
Preserve the instruction and the context around it, such as the drawing or specification at issue, related emails, daily reports, and records of the labor or materials used. Whether that evidence proves authorization or entitlement depends on the subcontract and applicable law; ask counsel how to preserve the claim if the amount or deadline is significant.
Does a subcontractor have to follow the prime contract?
Only to the extent the subcontract incorporates or otherwise makes relevant particular prime-contract terms, subject to the agreement and applicable law. Review the subcontract’s incorporation and flow-down language rather than assuming the entire prime contract applies.
Can a GC and subcontractor settle a dispute without mediation?
They may be able to reach a voluntary agreement, but whether they can skip a contract-required mediation step before pursuing arbitration or litigation is a different question. Check the clause and get legal advice before bypassing a required prerequisite.
What happens if a subcontractor misses a claim-notice deadline?
The consequence depends on the notice clause and governing law; a missed deadline may affect a claim, but the result cannot be determined from a general guide. Preserve the records, send any notice still available under the contract, and consult a construction lawyer promptly.
