What are the legal remedies available when a construction project runs over budget?

In Washington, there are several legal remedies available when a construction project runs over budget. First, there may be a clause in the construction contract that states the rights of the parties in case of overspending. This contract would outline the responsibilities of each party, as well as what would happen if the project goes over budget. The contract may provide for the contractor to pay additional amounts, or the owner to agree to accept a lesser quality of work or longer time frame. Second, if there are problems with the contracts or if the project goes significantly over budget, the owner and the contractor may be able to enter into a binding arbitration wherein the parties agree to settle the dispute in an impartial manner. This might involve mediation or a more formal process where a third-party renders a decision about how to resolve the dispute. Third, a party can go to court and file a lawsuit. This is a more expensive option as court costs and attorneys fees may be incurred; however, it can be necessary if the dispute cannot be resolved through more informal means. In this case, the court will examine the facts, review the applicable law and make a determination as to who is responsible for the overspending. Finally, the parties can renegotiate the contract and make changes to the scope of the project to ensure it comes in on budget. This might include removing or reducing elements of the project, or finding cost savings in the materials and labor needed. This option is often the most preferred as it can keep the project on track without the need for additional resources or court proceedings.

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What are the legal remedies available when a construction project runs over budget?

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