Construction Surprises That Cost Big: Managing Differing Site Conditions the Right Way

Few things can derail a construction project faster than the unexpected. You can have detailed plans, expert engineers, and a solid contract in place—but if you hit a pocket of unsuitable soil, uncover a buried utility line, or discover hazardous materials, everything changes. Costs increase, schedules slip, and tensions rise between contractors and owners.

These surprises are known in the industry as unforeseen site conditions or differing site conditions (DSCs). They’re a leading cause of construction disputes nationwide, accounting for a significant portion of litigation and arbitration cases each year. For contractors and owners alike, understanding how DSCs are defined, addressed in contracts, and resolved legally can mean the difference between a manageable hiccup and a full-scale dispute.

What Exactly Are Differing Site Conditions?

Under most standard construction contracts, differing site conditions are defined as physical site conditions that differ materially from what was anticipated or represented. They generally fall into two categories:

Type I Conditions: When actual conditions differ materially from those indicated in the contract documents. Example: Contract documents show stable soil, but excavation reveals saturated sand or clay that requires special treatment.

Type II Conditions: When conditions are unusual, unexpected, and not typically encountered in the kind of work being performed. Example: Finding contaminated groundwater or abandoned underground tanks where none were reasonably expected.

This classification matters because it dictates who shoulders the risk and whether the contractor can claim additional time or compensation.

Why Differing Site Condition Clauses Exist

The purpose of including differing site conditions clauses in construction contracts is twofold:

Fair Risk Allocation – Owners are generally in the best position to provide accurate site information (through surveys, geotechnical studies, etc.), while contractors rely on that information when bidding. Without these clauses, contractors would pad their bids to account for every potential unknown.

Encouraging Competitive Pricing – By assuring contractors they won’t be punished for genuine surprises, these clauses promote realistic bids and fairer competition.

For Florida construction projects, where conditions like high water tables, sinkholes, and coastal permitting issues are common, DSC clauses are especially important.

Common Unforeseen Conditions in Florida

Florida’s unique geography makes it a hotbed for DSC disputes. Contractors and owners often encounter:

Soil and Groundwater Issues: Florida’s sandy soil and high water table can create unexpected foundation problems. In some cases, karst terrain creates sinkhole risks.

Hidden Utilities: Many older Florida communities have outdated or poorly documented underground utilities. Discovering unmarked sewer or water lines is not uncommon.

Environmental Hazards: Projects may uncover asbestos, petroleum contamination, or wetlands subject to strict environmental regulation.

Archaeological Finds: Construction in historically significant areas sometimes reveals Native American artifacts or historic structures, triggering preservation laws.

Each of these conditions carries its own regulatory requirements and potential for delay and dispute.

Contractor Obligations When Conditions Arise

When contractors encounter an unforeseen condition, how they respond is crucial. Standard obligations include:

Immediate Notice: Contracts usually require written notice within a set timeframe (often 7–14 days). Missing the deadline may waive the claim.

Suspension of Work: Continuing work without clarification can worsen the problem and jeopardize the contractor’s ability to recover costs.

Thorough Documentation: Photographs, videos, daily logs, and written reports create the evidence needed for negotiation or litigation.

Seek Written Instructions: Owners or architects must provide formal direction on how to proceed. Verbal instructions aren’t enough.

Owner Responsibilities and Risks

Owners also bear obligations under DSC clauses. Their responsibilities include:

• Investigating the Claim: Owners should promptly engage consultants to confirm the condition.
• Issuing Change Orders: If the condition qualifies, owners must fairly adjust the contract price or schedule.
• Avoiding Denial of Legitimate Claims: Wrongly refusing adjustments can lead to litigation, which often ends in costly judgments against the owner.
• Maintaining Communication: Owners who maintain transparency with contractors can often resolve disputes before they escalate.

Legal Remedies When Disputes Arise

Not every differing site condition leads to agreement. When disputes escalate, parties may turn to:

• Mediation: A facilitated negotiation process that helps avoid litigation.
• Arbitration: A binding, private process often required by contract.
• Litigation: When negotiations fail, disputes may head to court. Florida courts typically analyze the contract language, notice compliance, and whether conditions were reasonably foreseeable.

How to Prevent DSC Disputes

Prevention is always better than cure. Owners and contractors can reduce risks by:

Investing in Pre-Construction Investigations: Soil borings, utility surveys, and environmental assessments provide critical baseline data.

Drafting Strong Contracts: Clear DSC clauses and notice provisions reduce ambiguity.

Allocating Risk Intentionally: Some contracts explicitly place certain risks (like hazardous materials) on the owner, while others shift responsibility to the contractor.

Legal Review Before Signing: Having a Florida construction attorney review contracts can help spot gaps that could later lead to disputes.

Final Thoughts

Unforeseen site conditions are a reality of construction, particularly in a state like Florida with its challenging soil, coastal zones, and environmental regulations. But these surprises don’t have to turn into disasters. With strong differing site conditions clauses, prompt notice, clear documentation, and open communication, contractors and owners can navigate surprises without derailing the project.

When disputes do arise, legal remedies exist to balance the scales—but avoiding the courtroom through proactive planning and fair contract drafting is always the smarter strategy.

Facing Unexpected Site Conditions on Your Project?

Don’t let unforeseen soil problems, hidden utilities, or environmental hazards turn into costly disputes. At DuFault Law, we help contractors, developers, and property owners in Florida navigate differing site condition clauses, protect their legal rights, and resolve disputes efficiently.

• Call us at (239) 422-6400
• Email us at contact@dufaultlaw.com
• Or Visit our Contact Page to schedule a consultation