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A construction attorney's 30-year perspective on contract ambiguity, AI prevention, and why it matters to your bottom line 

A construction project moves forward. The scope document says the contractor builds the structure and finishes the interior, yet the drawings suggest something slightly different, and the site reality becomes something altogether different. 

Somewhere between month three and month six, someone notices the conflict. By then, the project is haemorrhaging money, the owner expected one thing, the contractor never committed to it, and change orders accumulate as relationships deteriorate. 

This scenario plays out constantly in construction. It's the hidden cost of ambiguous contracts. 

Michael Vardaro has spent 30 years in construction law watching this pattern repeat. What he's discovered is something most construction executives overlook: disputes rarely originate from technical failure or poor execution. They come from contracts built on assumptions rather than clarity. AI is now beginning to surface these conflicts before they become expensive problems. 

Most construction disputes don’t start on site. They start in the contract. After 30 years in construction law, Michael Vardaro has seen the same pattern:

Scope ambiguity, not execution, is the real cost driver.

AI is changing this. Instead of basic keyword searches, AI now:

In one case, AI identified 17 potential change orders before construction began.

Adoption is accelerating fast. The shift is clear: Construction law is moving from reactive dispute resolution to proactive dispute prevention.

The question isn’t whether AI matters. It’s whether your contracts are being stress-tested before they cost you money.

Construction lawyers work in a unique space compared to their counterparts in other industries. They need to understand both legal language and the technical realities of how buildings actually get built. The two are inseparable.

Michael manages enormous volumes of data from construction projects: emails, RFIs, daily reports, drawings, specifications, text messages, and chat threads. That data volume is challenging, but it's not the deepest problem. 

"You really can't do this unless you understand the technical complexities of construction," he explains. 

Construction work demands that lawyers combine legal expertise with genuine knowledge of site execution, logistics, and technical constraints. Your contracts contain hidden assumptions: 

Most of the time, they don't. 

For decades, construction lawyers relied on Boolean search to find documents in massive project files. Search for a keyword, get back exact word matches. The system functioned until complexity overwhelmed it. 

Different project managers describe the same problem using completely different terminology. One writes "structural delay." Another references a "foundation issue." A third calls it a "load-bearing component delay." A Boolean search for "structural delay" misses the other two versions entirely, and critical context vanishes. 

AI introduced a different approach. Semantic understanding finds what lawyers actually need rather than requiring exact keyword matches. "What AI can do is provide the first pass," Michael notes. It narrows the field and gets lawyers to the right information faster. Then human judgment takes over, where interpretation and legal reasoning belong. 

One case involved a complex pre-construction analysis using a platform called Firmus AI. The contractor fed in drawings and specifications. The AI analyzed them and identified 17 potential change orders, each one specifically referencing the contract language that conflicted with the drawings or noting where something wasn't specified correctly. 

This approach provides lawyers with a filtered, prioritized list of actual problems rather than forcing them to wade through thousands of documents manually. 

The Outcome: Faster analysis leads to faster negotiation, and faster negotiation prevents disputes before the project starts. 

Most project leaders focus on three elements when reviewing contracts: cost, timeline, and scope. Scope receives the least attention despite being the most critical, which creates the real trap. 

What goes wrong follows a predictable pattern. The owner expects the contractor to deliver X. The contractor doesn't think they're committing to X. Nobody documents the disagreement during contract negotiation because everyone assumed it got covered in previous meetings. Rarely does it get properly documented in the contract language itself. 

Scope ambiguity creates damage through undefined holes and missing specificity, not through incompetence. The consequences cascade: 

Michael has observed a recurring dynamic: meetings and discussions happen before contract signing, and people talk, thinking they understand each other. Then nobody properly documents that shared understanding in the actual contract language. 

The new tools now identify these scope conflicts before anyone breaks ground, flagging where drawings contradict specifications and surfacing where nothing is specified at all. They highlight scope holes that would create claims later, preventing extraordinary damage downstream. 

Most AI conversation in construction focuses on job site efficiency or project tracking. Less attention goes to where disputes actually originate: in the contract itself, during negotiation, before any work starts. This is where AI adds genuine value for project teams. 

Where it helps: 

For significant projects, contracts are genuinely complex, with multiple entities needing aligned scopes and different contractors accepting different risk levels. What one contractor will accept, another will decline. "You have an appetite for a particular project with certain risks, whereas another contractor may say, 'We're really not interested,'" Michael explains. Contracts need to reflect that clearly, with no gray zones about who is accepting what risk. 

Effective communication reduces the chance disputes happen in the first place, and AI helps enforce that communication by surfacing misalignment early. The coordination problem disappears once everyone can see what's actually in the contract and where the conflicts remain. 

If you're managing construction projects, overseeing contracts, or heading operations, your legal strategy is changing whether you've noticed it or not. AI is reshaping how construction disputes get prevented, which means your team needs to think differently about contracts and risk. 

Here are the questions that matter: 

Michael makes an interesting observation: construction lawyers have been thinking about project management for decades. They've worked with contractors who understand critical path methodology, sequencing, and dependencies. That's different from other legal specialties. The ones adapting fastest to AI are combining these project management skills with new tools that surface conflicts early. 

That combination is what prevents the disputes that cost you money and time. 

Fragmented tools exist in construction legal tech. Document review tools, legal research platforms like Co-counsel and Harvey, case preparation software, and project management systems all operate independently, but nothing brings them together into a cohesive solution. 

No integrated platform exists that construction lawyers can use as a one-stop shop to prepare cases end-to-end. The tools are point solutions, and the work still requires stitching everything together manually. 

As Michael puts it, "There's no solution that exists for us to kind of use as a one-stop shop." 

Here's why this matters for you: it means scope conflicts don't get surfaced as early as they should. It means contract review stays disconnected from your project timeline. It means disputes that could have been prevented in month one still happen in month six. That's expensive. And it's preventable. 

AI is now surfacing conflicts before they become disputes, making contract negotiation faster and more thorough, and helping construction leaders understand that scope definition matters more than cost or timeline. Scope ambiguity is where disputes actually originate. 

This shift is accelerating across the industry. According to the 2025 State of Contracting Survey by LegalOn Technologies, AI adoption for contract review has surged 75% in just one year, with 14% of legal professionals now actively using AI tools compared to only 8.1% the year before. Your competitors and peers in construction are increasingly adopting these tools. The tools are becoming sharper, and the prevention mechanisms are becoming clearer. 

For construction companies, this raises a straightforward question: are you thinking about the contracts that govern your projects the same way your teams should be thinking about them? Are you identifying your scope holes before they become your disputes? 

What's been your biggest source of contract disputes or scope misalignment? Reply to this newsletter. We read every response and want to understand what's happening in your projects. 

Check out our conversation with Michael Vardaro here 👇👇👇

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