Construction Litigation in the Bay Area

California Construction Law: Key Frameworks for San Jose Disputes

California construction disputes are governed by an intersection of statutory schemes, contract principles, and case law. Understanding which frameworks apply shapes how a claim is pursued and what remedies may be available.

The Right to Repair Act (SB 800)

California’s Right to Repair Act, effective since 2003, governs residential construction defect claims. It establishes performance standards for new residential construction and requires a pre-litigation notice-and-repair process that builders generally must follow before a homeowner may file suit, subject to the circumstances of the matter. The Act applies specifically to residential construction; commercial construction defect claims are typically pursued under breach of contract or negligence theories, depending on the circumstances.

Mechanics’ Liens, Stop Payment Notices & Payment Bonds

California Civil Code sections 8000 through 9566 establish the statutory payment remedies that may be available to contractors, subcontractors, and material suppliers on private works of improvement, depending on the specific facts. Mechanics’ liens and stop payment notices are often the two primary remedies on private projects. Payment bonds are typically required on public works projects, where lien rights against public property aren’t available, and they may provide an alternative path for subcontractors and suppliers to recover payment. Preliminary notice and recording deadlines under these statutes are strict; missing a deadline may affect the availability of a remedy.

Contractor & Owner Good-Faith Obligations

California requires both contractors and owners to perform their contractual obligations in good faith. Owners may not unreasonably interfere with or delay construction progress. These obligations can be relevant in delay claims, payment disputes, and change-order disputes, though how they apply depends on the specific contract terms and facts of each matter.

Dispute Resolution Paths in California Construction Litigation

Not every construction dispute proceeds to trial. California law and standard construction contracts offer several paths to resolution, and the right approach depends on the contract terms, the relationship between the parties, and the nature of the dispute.

Negotiation & Mediation

Many California construction contracts include mandatory mediation clauses that the parties must satisfy before pursuing litigation or arbitration. Under California Civil Code Section 8850, which may apply to most private construction contracts entered into on or after January 1, 2026, a statutory claims and mediation process may also be required for many disputes on commercial projects, independent of what the contract says. 

Mediation is a non-binding process in which a neutral third party facilitates settlement discussions but cannot impose a resolution. Early negotiation or mediation, before positions become fixed, may preserve business relationships and expand settlement options. Whether and how these paths apply depends on the specific facts and contract terms of your matter.

Arbitration

Construction contracts frequently include arbitration clauses requiring disputes to be resolved outside of court. Arbitration typically results in a binding decision and may proceed on a different timeline and under different procedural rules than court litigation, depending on the arbitration agreement. The scope and enforceability of an arbitration clause can itself become a contested issue in some disputes.

Litigation in California Courts

When pre-litigation remedies and settlement discussions don’t resolve a dispute, formal litigation may follow. Most private construction disputes in San Jose and Santa Clara County are often heard in Santa Clara County Superior Court, depending on the claims and circumstances. Litigation may involve written discovery, depositions, expert witnesses, including construction professionals and damage assessors, and trial. Some disputes involving federal contracts or federal agencies may be heard in federal court. The timeline and process for any specific matter will vary based on the claims, the parties, and the court’s docket.

Experienced Advocates for Complex Disputes

Strategy Law, LLP's litigation attorneys combine decades of trial experience with a practical, client-focused approach to resolving disputes. 

Steven Kahn has litigated real estate matters for 20 years, including title, boundary, easement, and contract disputes, alongside general business litigation, drawing on experience at in-house counsel roles and firms large and small. Phillip Wang's practice spans commercial litigation, bankruptcy and creditors' rights, and real estate, with a focus on representing companies, lenders, and international clients—particularly Chinese businesses operating in the U.S.—in complex disputes. Kevin Martin has spent more than 27 years handling business litigation, real estate issues, intellectual property matters, and employment disputes, bringing a business-minded approach shaped by extensive experience in 

California's state and federal courts. Between them, these attorneys cover an unusually broad range of litigation needs for businesses and individuals alike.