January 30, 2013 Articles

A Tangled Web: Contract Dispute Resolution Process

An examination of the current status of the evidentiary rules with particular emphasis on the federal evidentiary standard relating to settlement negotiations and the relationship between that standard and the industry form contracts

by Sean Devenney and Shelley McCoy

To  minimize the potential for simple communication failures to result in  protracted and expensive litigation on construction projects, all of the major  industry construction contract forms include communicative processes that must  occur before a claimant files suit or requests arbitration. One goal of the  process is to reduce the potential for inefficient and unnecessary litigation  by resolving claims as they arise on the job site. Engaging in open and early  communication about a particular issue on a construction project, however, is  not without risk. Specifically, statements made during the open communication  process before facts have been fully developed could prejudice a party's  position during litigation if the contractually required pre-suit process  fails. Although many state and federal courts have adopted rules of evidence  protecting statements made during the course of settlement negotiations from  introduction at trial, those rules of protection also have their limitations.  This article examines the current status of the evidentiary rules with  particular emphasis on the federal evidentiary standard relating to settlement  negotiations and the relationship between that standard and the industry form  contracts.

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