Construction contract disputes: payment, delay and variations

Construction projects rarely go exactly to plan. When disagreements escalate, they usually concern one of three things: payment, delay or variations. The outcome often depends less on who is “right” in principle and more on what the contract says and what was recorded at the time.

Payment

• Know the payment mechanism: milestones, interim valuations, retention and the timetable for certification.
• Issue and respond to payment applications in the form and time the contract requires.
• Late or partial payment may give rights to interest, suspension or termination — but only if the contractual steps are followed.

Delay

• Most standard forms (including FIDIC-based contracts common on larger projects) require prompt notice of events that may delay completion. Missing a notice deadline can cost an otherwise good claim.
• Liquidated damages clauses fix the employer’s compensation for late completion; extensions of time can relieve the contractor where delay is caused by the employer or excepted events.
• Keep programmes updated and minutes of site meetings — they are often decisive evidence.

Variations

• Record every change instruction in writing, ideally before the work is done.
• Agree the valuation method early; disputes over “extra work” are much harder to resolve months later.

Resolving the dispute

Many construction contracts provide for negotiation, then mediation or expert determination, then arbitration. Arbitration in Nigeria is governed by the Arbitration and Mediation Act 2023, and awards are generally enforceable through the courts. Litigation remains available where the contract does not provide otherwise.

Practical tips

• Read the notice clauses at the start of the project and diarise deadlines.
• Keep daily records, photographs and correspondence organised.
• Take advice early — before positions harden.

Every situation is different — for advice on yours, speak with our team in confidence.