Lawyers for Construction Companies
We work with construction contracting businesses across the Kingdom on contracts, compliance and disputes, with a practical grasp of how the sector actually operates.
Overview
Construction companies lose money in three places: an ambiguous scope of work, variations executed before they were priced, and delay penalties for causes that were never documented at the time. None of these is an engineering problem; all are documentation problems, solved by discipline in correspondence rather than skill in advocacy.
We work with contractors, developers and consultants across the project lifecycle: contract review before signature, aligning subcontracts with the main contract, managing claims, variations and extensions of time, performance guarantees, then the dispute before a court or tribunal where needed.
We always advise construction companies to spend hours on contract review instead of weeks on a dispute. A contract read legally before pricing reveals terms that make the project loss-making before it starts — and that is the cheapest possible moment to discover it.
The legal framework
The construction sector operates within a layered contractual and regulatory framework:
- The Civil Transactions Law on construction contracts and liability
- The Government Tenders and Procurement Law on public projects
- Municipal requirements and the Saudi Building Code
- The Labour Law and site safety and workforce requirements
- The Arbitration Law in major project disputes
- The rules on performance and advance payment guarantees
Situations we handle
Contract review before pricing
Penalty, delivery and guarantee terms can make a project loss-making. They are read legally before being priced financially.
Aligning subcontracts
Mismatched periods, liability and insurance between the two contracts push the entire gap onto the main contractor.
An extension of time claim
Built on events documented with dates and their effect on the critical path, not on a general description of delay.
A dispute over variations
Executing before the price is agreed is the largest source of loss. We fix the mechanism in the contract from the start.
A defects claim after handover
Liability continues after handover for defined periods, and early technical documentation determines who is actually responsible.
Costly mistakes we see
- 1
Acting on verbal instructions
A verbal direction from the employer or consultant is denied when the claim is made. Do not execute before a written order.
- 2
Accepting an impossible programme
An unrealistic schedule produces a certain penalty. Negotiating it before signature is far easier.
- 3
Late correspondence
Claims carry a notice period under the contract. Delay forfeits an entitlement that was substantively valid.
- 4
Neglecting the daily project file
A file kept in order daily is the real difference in any later dispute, and it cannot be reconstructed retrospectively.
How the procedure runs, step by step
Construction companies lose money in three places: an undocumented claim, an open bank guarantee, and a subcontract not tied back to the main contract. We work on all three together.
- 1
Review the live contract portfolio
We review current contracts and their notice, payment application and variation provisions. Contractors typically hold valid claims that lapsed for want of notice, and mapping them now recovers what has not yet lapsed.
- 2
Build a claims documentation system
We provide ready forms: delay notice, variation order, site minute, and extension claim. Ready forms let the engineering team document without waiting on a legal department.
- 3
Align subcontracts and supply contracts
We tie subcontracts to the main contract on periods, penalties, acceptance criteria and payment. An unaligned subcontract leaves the main contractor liable to the owner with no recourse down the chain.
- 4
Manage bank guarantees
We track guarantee validity dates and the conditions for release. A guarantee not released after final handover consumes credit capacity you need for the next project.
- 5
Settlement or arbitration in dispute
We assess each claim on value against the cost of technical proof. A contractor who litigates every disagreement drains its liquidity; one who litigates none is drained by its clients.
Documents we will ask you for
- Current main contracts and subcontracts
- The approved and updated programme
- Payment applications submitted and certified
- Variation orders and notices served
- Bank guarantee letters and their dates
- Site minutes and progress reports
Fees and timelines
Contract review is offered at a fixed fee per contract. Claim files are priced by stage: document review and building the claim, negotiation, then litigation or arbitration. Large projects can be covered by an annual arrangement.
On timing: contract review takes three to seven working days. Building a delay claim takes two to six weeks depending on document volume. Disputes run for months and generally require engineering expertise.
Common questions
What is the most important clause in a construction contract?
The scope of work. Most disputes begin with disagreement over whether an item was within scope or a variation deserving payment, and clarity here prevents an entire chain of later arguments.
How do we claim an extension of time?
By proving the cause of delay is not attributable to you, that it is documented with dates, that you notified it within the period the contract requires, and that it affected the project's critical path.
Can delay penalties be resisted?
They can be challenged by proving causes of delay not attributable to you, or that the penalty exceeds its contractual and statutory limits. The defence rests on the programme and dated correspondence.
What do we do about a verbal variation?
Do not execute before it is confirmed in writing. If site necessity forces you to proceed, send immediate correspondence recording the instruction and its cost and time effect, and keep proof of receipt.
How long does our liability for defects last?
It continues after handover for periods set by the law and the contract, and differs between apparent, latent and fundamental structural defects. Technical documentation when the defect appears is what settles responsibility.
Are government contracts different?
Yes. They fall under the Government Tenders and Procurement Law, with distinct rules on variation, extension and penalties that differ materially from private contracts and require a different approach to correspondence.
When should we choose arbitration?
Usually on large technical projects, because the tribunal can include engineering expertise and confidentiality is preserved. On smaller projects arbitration costs are hard to justify against the amount in dispute.
Do you review subcontracts?
Yes, and they are among the most important documents we review: a subcontract that does not mirror the main contract on periods, liability and insurance pushes the entire gap onto you for nothing.
Related services
Construction & Engineering Lawyers
We act for owners, contractors and consultants on project contracts and disputes.
Public Procurement Lawyers
We help suppliers qualify and compete for government contracts, and challenge award decisions.
Labour Lawyers
We act for employers and employees on workplace matters, from contract drafting to representation before the labour courts.