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Types of Construction Contracts:
Lump Sum Contract: The contractor agrees to complete the project for a fixed price. Changes to the scope of work or delays could lead to renegotiations.
Cost-Plus Contract: The client pays for actual costs incurred during the construction process, plus a set fee or percentage for overhead and profit.
Time and Materials Contract: The client pays based on the time the contractor spends and the materials used on the job. Common when project scope is unclear.
Unit Price Contract: Payment is based on predetermined unit rates for each type of work. This is typical when quantities are uncertain.
Key Legal Principles in Construction Contracts:
Offer and Acceptance: An agreement must be made, with clear offers and acceptance between the parties.
Consideration: There must be something of value exchanged between the parties (e.g., money for services or materials).
Capacity and Intent: The parties must have the capacity to contract (e.g., no minors or incapacitated individuals) and must intend to create legal relations.
Terms and Conditions: The contract must clearly define the work scope, timeline, quality standards, price, payment schedules, etc. Clauses can cover force majeure, dispute resolution, delays, etc.
Legal Documents in Construction:
Project Specifications: Detailed instructions regarding the materials, work quality, and methods to be used.
Drawings and Plans: These represent the physical blueprint of the work to be completed.
Schedules: Timelines or schedules set out for completion and milestones.
Change Orders: Documents detailing any modifications to the contract or scope of work.
Bonding and Insurance: Insurance policies and performance bonds are often required to ensure project completion and financial protection for both parties.
Governing Law and Jurisdiction:
Construction contracts are governed by the laws of the jurisdiction specified in the contract. Common laws include local construction statutes, regulations, and building codes. International construction projects may also involve international treaties or conventions.
Breach of Contract:
A breach occurs if one party fails to fulfill their contractual obligations. This could include delays, poor workmanship, or failure to pay. The non-breaching party may seek remedies such as damages, performance, or contract termination.
Practical Strategies for Risk Management and Dispute Resolution in Construction Contracts
Risk Management in Construction:
Risk Identification: Recognize and analyze potential risks such as delays, cost overruns, injuries, environmental issues, and supply chain disruptions.
Example: Identifying risk related to the availability of raw materials or skilled labor shortages can help in creating a more realistic timeline.
Risk Allocation: Clearly define how risks are shared between the parties in the contract. This could include shifting risks related to weather delays, design changes, or third-party interference.
Example: An owner may take responsibility for unforeseen site conditions, while the contractor manages risks related to labor and materials.
Insurance: Proper insurance coverage for both contractors and owners is vital. Common types of insurance in construction include:
General Liability Insurance: Covers third-party injuries and property damage.
Workers’ Compensation: Covers workers in case of injury on site.
Professional Liability: Protects professionals like architects and engineers from errors or omissions.
Builder’s Risk Insurance: Covers damage to the construction project itself.
Contingency Planning: A well-defined contingency fund should be included in the budget for unexpected costs.
Example: An extra 10% of the total project cost can be set aside for unanticipated delays or design changes.
Project Monitoring: Constant monitoring and supervision can reduce risks. This includes tracking progress against the schedule and budget and identifying any potential problems early.
Dispute Resolution in Construction Contracts:
Mediation: A neutral third party helps the parties reach a voluntary, non-binding settlement. It is an informal and flexible way to resolve disputes.
Example: If there is a disagreement about construction delays, a mediator may help both parties agree on a revised timeline.
Arbitration: A more formal process where an arbitrator (or panel) reviews the evidence and makes a binding decision. This is typically faster than court litigation and can be more cost-effective.
Example: Disputes over cost overruns may be resolved by arbitration if stipulated in the contract.
Litigation: Court proceedings where a judge decides the dispute. This is often the last resort and can be costly and time-consuming.
Example: If the contractor defaults on the project, litigation may be necessary to recover damages.
Dispute Resolution Clauses: It’s essential to include provisions in the contract that outline the dispute resolution process. These can specify whether mediation or arbitration is required before litigation.
Example: “In the event of a dispute, the parties agree to mediate first and, if unsuccessful, proceed to binding arbitration under the rules of [arbitration institution].”
Escalation Clauses: These clauses require that disputes be resolved in stages. For example, a lower-level supervisor may first address a dispute, with escalation to project managers or senior leadership if necessary.
Avoiding Disputes:
Clear Communication: Ensuring constant and clear communication between all parties can prevent misunderstandings.
Detailed Contracts: Clearly outline roles, responsibilities, timelines, and expectations.
Regular Inspections: Continuous project monitoring and site inspections can ensure quality and avoid disputes over workmanship.
Change Orders: A formal process for managing any changes to the scope of work is essential. Ensure both parties sign off on any alterations.
Dispute Review Boards (DRBs): For larger projects, a DRB can be established to address disputes during the project, rather than waiting until project completion.
Example: A DRB could oversee decisions about delays and construction methods as the project progresses, helping to keep things on track.
Contractual Terms in Construction Contracts:
Implied Terms: In addition to the express terms written in the contract, construction contracts may include implied terms based on the law or established custom. These terms are implied even if they are not explicitly stated in the contract.
Example: There is an implied term that contractors will complete their work in a workmanlike manner, adhering to industry standards.
Conditions Precedent: These are specific conditions that must be met before a contractor or owner is bound by the contract. A construction project may specify that certain approvals or permits need to be granted before work begins.
Example: The contract may state that construction cannot begin until local government permits are issued.
Performance Requirements and Guarantees: Construction contracts typically include performance clauses that require work to meet specified standards of quality, safety, and completion dates. In some cases, warranties and guarantees for workmanship and materials may be included.
Example: A contractor may guarantee that the building will meet specific energy efficiency standards or that the materials used will be free from defects for a certain period.
Construction-Specific Legal Frameworks:
Building Codes and Regulations: These regulations set the minimum acceptable standards for the design, construction, and alteration of buildings. Legal compliance with these codes is mandatory, and failure to do so can lead to legal liability, delays, or penalties.
Example: If a building is constructed without meeting the fire safety codes, it may lead to fines or, worse, the building being condemned.
Health and Safety Regulations: Construction contracts often involve compliance with safety standards, such as OSHA (Occupational Safety and Health Administration) regulations in the U.S., which mandate specific safety protocols to prevent accidents.
Example: Ensuring that all contractors provide personal protective equipment (PPE) for workers on site, or provide appropriate scaffolding to meet safety standards.
Environmental Regulations: In addition to local building codes, construction projects may also be subject to environmental regulations. These can involve protecting natural resources, managing waste, and controlling pollution during construction activities.
Example: A construction project may require an environmental impact assessment (EIA) before work can begin, or mitigation measures may be needed if sensitive wildlife habitats are impacted.
Contract Breaches and Legal Remedies:
Types of Breach: Breaches in construction contracts can take various forms, such as:
Minor Breach: Does not significantly affect the contract but can still result in claims for damages (e.g., slight delays).
Material Breach: A serious violation of the terms that significantly impacts the project. The non-breaching party may have the right to terminate the contract and seek compensation (e.g., failure to meet a critical deadline).
Remedies for Breach:
Damages: Financial compensation for losses suffered due to the breach. This can include direct losses (e.g., repair costs) and consequential losses (e.g., lost business or income).
Specific Performance: A court may order the breaching party to perform the contract as originally agreed, though this is rare in construction contracts due to the complexity and scale of the work.
Rescission: The contract is canceled, and both parties are relieved from further obligations.
International Construction Contracts:
International projects introduce additional complexity due to differing legal systems, cultures, languages, and currencies. Construction contracts for international projects often need to account for these differences.
International Standards: International contracts often incorporate widely recognized standards, such as FIDIC (International Federation of Consulting Engineers) or ICC (International Chamber of Commerce) model contracts.
Governing Law: International contracts typically include a clause specifying which country’s laws will govern the agreement.
Currency Risks: Contracts may include provisions that account for fluctuations in exchange rates, especially in long-term projects.
Practical Strategies for Risk Management and Dispute Resolution (Extended)
In addition to the strategies mentioned earlier, here are more advanced approaches for managing risks and resolving disputes in construction contracts:
Advanced Risk Management Techniques:
Risk Registers: Create and maintain a comprehensive risk register that tracks potential risks, assigns responsibility, and develops mitigation strategies. This document serves as a living tool that should be updated regularly throughout the project lifecycle.
Example: A risk register might note the potential for delays due to weather conditions, which could be mitigated by using weather-resistant materials or scheduling more indoor work during the rainy season.
Risk Transfer: Consider transferring certain risks to third parties through insurance or subcontracting. This is particularly common for risks like property damage, worker injuries, and environmental hazards.
Example: A contractor might transfer the risk of property damage to a subcontractor responsible for handling heavy machinery.
Early Contractor Involvement (ECI): ECI involves involving the contractor early in the design phase to identify potential risks and opportunities for cost savings. This approach fosters collaboration and ensures that the project is both feasible and cost-efficient.
Example: A contractor might suggest alternative construction methods or materials that could lower costs and reduce risk.
Quality Assurance (QA) and Quality Control (QC): Implement a rigorous QA/QC process that ensures work is performed according to the contract’s specifications. Having a well-established inspection and testing protocol can reduce risks associated with poor workmanship.
Example: Regular inspections of structural components can help detect issues like concrete cracks or misalignment early on, before they lead to costly repairs.
Advanced Dispute Resolution Strategies:
Partnering: Partnering involves creating a collaborative relationship between the project stakeholders to resolve issues before they escalate into disputes. This strategy is particularly useful for large, complex projects where all parties must cooperate to succeed.
Example: The owner, contractor, and subcontractors meet regularly to discuss any issues that arise and agree on a solution together, rather than letting these issues become formal disputes.
Dispute Review Boards (DRBs): For larger projects or high-risk construction contracts, setting up a DRB can be an effective way to address disputes as they arise. DRBs are typically composed of independent professionals who are knowledgeable about construction and are available to help resolve conflicts quickly.
Example: A DRB could be called in to help address disputes over the quality of materials used or disagreements about work scope changes without escalating to full-scale arbitration or litigation.
Adjudication: In some jurisdictions, adjudication is a fast-track, interim dispute resolution process where an independent third party is appointed to make a binding decision on disputes during the project. This process is particularly useful for resolving issues quickly, without causing significant delays.
Example: If a disagreement arises about a variation to the contract, adjudication can provide a temporary solution that allows work to continue while the dispute is being resolved.
Contract Clauses for Dispute Resolution:
Mediation-Arbitration (Med-Arb): A hybrid dispute resolution process where parties first attempt mediation to reach an agreement. If mediation fails, the mediator becomes an arbitrator and renders a binding decision. This combines the flexibility of mediation with the enforceability of arbitration.
Escalation Clauses: Define a specific process for escalating disputes through different levels of management or through an external third party before resorting to more formal dispute resolution methods like arbitration or litigation.
Claims Management:
Proactive Claims Prevention: Develop a system for monitoring and addressing potential claims early. Encourage open communication between all stakeholders and resolve minor disputes before they escalate into formal claims.
Example: The contractor can notify the project manager about potential delays due to supply chain issues in advance, allowing time to plan and adjust the project schedule.
Documenting and Managing Claims: Establish clear procedures for managing claims when they arise. Claims should be documented in detail, with all supporting evidence such as photographs, expert opinions, and reports. Keeping comprehensive records can help resolve claims more efficiently and defend against unjustified claims.
Example: If there is a delay caused by the client’s failure to approve change orders in time, the contractor should document all communications and submit a formal claim for additional time and costs.
Key Elements of Construction Contracts
Parties to the Contract: The contract identifies the key parties involved, typically the owner (client), the contractor, and subcontractors. In some cases, consultants like architects or engineers may also be parties to the contract.
Scope of Work: This defines what is to be constructed, the specifications, and deliverables. It is essential for preventing disputes related to project scope.
Contract Price: The total agreed-upon cost for the construction work. This could be a lump sum, time and materials, or cost-plus contract.
Time Frame: This sets the project completion deadline and outlines milestones, progress schedules, and penalties for delays.
Terms and Conditions: These clauses detail obligations, rights, dispute resolution methods, and the remedies available in case of a breach.
Types of Construction Contracts
Lump Sum Contract: The contractor agrees to complete the entire project for a fixed price. Common in projects with a clear scope of work.
Cost-Plus Contract: The owner pays the contractor for the actual costs incurred, plus a fixed fee or percentage of the costs. Used when the scope is not fully defined.
Time and Materials Contract: The owner pays for the time the contractor spends and the materials used. Suitable for projects with undefined or flexible scope.
Unit Price Contract: The contract is based on a predetermined rate per unit of work, often used in projects where quantities are uncertain.
Governing Laws and Regulations
National and Local Laws: Construction contracts are typically governed by the laws of the jurisdiction in which the project takes place. Local building codes, labor laws, safety standards, and environmental regulations play a vital role in governing the execution of the work.
Industry-Specific Regulations: Construction projects must comply with health and safety regulations (e.g., OSHA in the US), environmental laws, and zoning ordinances.
International Standards: For international projects, legal frameworks might reference international standards like FIDIC (International Federation of Consulting Engineers) or ICC (International Chamber of Commerce) model contracts.
Legal Issues in Construction Contracts
Breach of Contract: If a party fails to fulfill their contractual obligations, it may result in a breach. Common breaches include delays, failure to meet quality standards, and incomplete work.
Force Majeure: These clauses protect parties from unforeseeable events (e.g., natural disasters, war, etc.) that could prevent performance. Force majeure clauses define what constitutes an unavoidable event and outline the consequences.
Termination of Contract: Construction contracts may allow for termination due to delays, non-performance, or unforeseen conditions. Termination can be mutual or one party may unilaterally terminate based on specific causes.
Warranties and Guarantees: Contractors often provide warranties to ensure that the work meets specific standards for a period of time after project completion.
Practical Strategies for Risk Management and Dispute Resolution
Managing risks and resolving disputes efficiently is critical to the success of any construction project. Here are key strategies for effective risk management and dispute resolution:
Risk Management Strategies
Identifying Risks Early: Proactively identify potential risks related to budget, timeline, design, quality, and external factors such as weather and market conditions. This includes conducting a thorough risk assessment at the beginning of the project.
Example: A project team may identify the risk of material shortages due to global supply chain disruptions and work to secure alternative suppliers in advance.
Risk Allocation: Clearly define how risks will be shared among the parties involved in the contract. This often depends on the nature of the risk:
Contractor’s Risk: Risks associated with the construction process, such as labor shortages, cost overruns, or site accidents, are typically borne by the contractor.
Owner’s Risk: Risks related to funding or changes to the project scope may fall to the owner.
Shared Risk: Risks such as delays due to weather may be shared by both parties.
Insurance: Ensuring appropriate insurance coverage can mitigate the financial impact of risks. Common policies in construction include:
General Liability Insurance: Protects against property damage or bodily injury.
Worker’s Compensation: Covers injuries to workers on site.
Builder’s Risk Insurance: Covers damage to the construction project itself.
Professional Liability Insurance: Covers errors or omissions by architects or engineers.
Contingency Planning: Incorporate contingency funds and time buffers into the project budget and schedule to account for unforeseen circumstances, such as cost overruns, design changes, or delays.
Example: Adding a 10%-15% contingency to the project budget can help cover unexpected costs without impacting the overall financial health of the project.
Project Monitoring and Reporting: Regular monitoring of project progress against the schedule and budget can help identify issues early. Maintaining open communication between all stakeholders is key to proactive problem-solving.
Example: Weekly progress meetings and reports can help track potential delays or cost overruns, allowing corrective action to be taken quickly.
Contract Clauses for Risk Management:
Change Orders: Include provisions for handling changes in scope, design, or materials, ensuring that any changes are documented and approved in writing by all parties.
Liquidated Damages: Define penalties for delays or failure to meet specified project milestones, providing an incentive for timely completion.
Dispute Resolution Strategies
Disputes are a common part of construction projects, but having a structured approach to resolve them can help avoid escalation and litigation.
Mediation: A voluntary, non-binding process where a neutral third party facilitates discussions between the parties to help them reach a mutually acceptable solution. Mediation is often the first step in resolving construction disputes before escalating to arbitration or litigation.
Example: A dispute over a cost increase could be mediated by an independent professional to find a compromise without involving legal proceedings.
Arbitration: A more formal process where an independent third-party arbitrator reviews the facts and makes a binding decision. Arbitration can be faster and less expensive than litigation, and it is often preferred in construction contracts.
Example: A dispute over payment or completion timelines may be settled through arbitration if specified in the contract’s dispute resolution clause.
Litigation: If other methods fail, litigation may be necessary. However, this is often a last resort due to its time-consuming and costly nature.
Example: If a contractor has not been paid or there’s significant contract non-compliance, litigation may be the only option to resolve the issue and obtain compensation.
Dispute Review Boards (DRBs): DRBs consist of independent experts who are available throughout the project to address and resolve disputes as they arise, helping avoid delays and prolonged conflicts.
Example: A DRB could review issues relating to work quality, change orders, or delays in real-time and provide a binding decision.
Escalation Clauses: These clauses specify a step-by-step process for resolving disputes, starting with lower-level managers and escalating to higher authorities or neutral third parties. This approach ensures that issues are addressed promptly at the lowest possible level.
Example: If there is a disagreement about the work quality, the contract might require that the project manager first attempt to resolve the issue before involving senior management or a third-party mediator.
Partnering Agreements: Partnering is a collaborative approach where all stakeholders (owner, contractor, subcontractors) agree to work together toward common project goals. This involves sharing risks, solving problems together, and ensuring open communication.
Example: A partnering agreement might be used to resolve delays by agreeing on shared responsibilities for meeting milestones and minimizing risks.
Managing Claims
Claims Prevention: The best way to handle claims is to prevent them. Clear and detailed contracts, regular communication, proper documentation, and proactive risk management can reduce the likelihood of disputes and claims.
Example: If a delay occurs, having written documentation explaining the cause of the delay (such as weather-related disruptions) can help protect against claims for liquidated damages.
Documenting Claims: When disputes arise, comprehensive documentation is essential. This includes keeping records of communications, inspections, photos, reports, and meeting minutes. Having clear evidence strengthens the position of the party making the claim.
Example: If a contractor wants to claim additional costs due to design changes, they should keep records of the change orders, timelines, and any correspondence with the owner or architect.
Risk Management Strategies
Risk Identification and Assessment
Early Identification of Risks: The first step is to identify potential risks at the start of the project. Risks can be categorized into various types such as financial, operational, legal, safety, environmental, and schedule-related risks.
Example: A construction company identifies the risk of supply chain disruptions due to geopolitical factors or weather patterns, which could delay material delivery.
Risk Assessment: Once identified, assess the likelihood and impact of each risk. This can be done through qualitative (subjective) or quantitative (data-driven) analysis.
Example: An assessment may reveal that a delay in material supply has a medium likelihood but could cause significant project delays and cost overruns.
Risk Allocation
Clear Allocation in Contracts: Risk allocation involves clearly specifying which party is responsible for which risks in the contract. This ensures that each party is aware of their obligations and liabilities.
Example: In a cost-plus contract, the risk of material price fluctuations may be borne by the owner, while the contractor may be responsible for labor-related issues.
Contingency Plans: Include contingency budgets and time buffers to handle unforeseen risks. This proactive approach can help minimize delays and avoid unnecessary costs.
Example: Allocate a contingency fund of 10%-15% of the total project budget for unexpected issues such as delays caused by weather or changes in building code requirements.
Monitoring and Managing Risks
Regular Risk Reviews: Risks should be continuously monitored throughout the project. This can be done through regular team meetings and site inspections.
Example: If weather conditions start to impact the schedule, the project team may take action by adjusting the timeline or increasing the workforce on certain tasks.
Risk Register: Create and maintain a living document (risk register) that tracks identified risks, assigns responsibility, and outlines mitigation plans.
Example: The project manager maintains a risk register that includes potential risks, their likelihood, impact, and current mitigation efforts, which is updated weekly.
Insurance
Appropriate Insurance Coverage: Ensure that the necessary insurance policies are in place to cover key risks. This can include:
General Liability Insurance: Protects against third-party injury or property damage.
Builder’s Risk Insurance: Covers damage to the project itself, such as fire or theft during construction.
Professional Liability Insurance: Covers errors made by architects, engineers, or other consultants.
Worker’s Compensation Insurance: Covers injuries to workers on the job site.
Contract Clauses for Risk Management
Change Order Clauses: Incorporate clear procedures for handling changes in scope or specifications. This prevents scope creep and ensures both parties agree on adjustments.
Example: A clause requiring the owner to approve any design changes in writing to avoid disputes over added costs or delays.
Force Majeure Clauses: Protect against events beyond the control of either party (e.g., natural disasters, war, pandemics) by defining what constitutes a force majeure event and outlining the consequences.
Example: A clause stating that the project schedule will be extended if construction is halted due to a natural disaster.
Dispute Resolution Strategies
Even with proactive risk management, disputes may arise during a construction project. Having effective dispute resolution mechanisms in place can help address issues efficiently and avoid litigation.
Preventing Disputes Before They Arise
Clear Communication: Ensure regular, open communication between all project stakeholders (owners, contractors, subcontractors, designers). Keeping everyone informed helps avoid misunderstandings that could escalate into disputes.
Example: Regular project meetings (e.g., weekly or biweekly) where the project’s progress, challenges, and risks are discussed.
Detailed Contract: A well-drafted contract with clear terms, responsibilities, and expectations can prevent ambiguity and reduce the chances of disputes.
Example: A contract that specifies detailed project schedules, payment terms, quality expectations, and procedures for handling delays or changes.
Documentation: Keep detailed records of all communications, agreements, and approvals. This can serve as evidence if a dispute arises.
Example: Documenting all emails, phone calls, meeting minutes, and site reports.
Dispute Resolution Hierarchy (Escalation Clauses)
Escalation Process: Include an escalation clause that outlines the steps for resolving disputes at progressively higher levels of authority within the parties involved. This ensures issues are addressed promptly at the lowest possible level.
Example: First, the project manager attempts to resolve the dispute with the contractor. If unresolved, it is escalated to senior management, then to a mediator or arbitrator if necessary.
Mediation: Involves a neutral third-party mediator who facilitates discussions between the parties to reach a mutually acceptable solution. Mediation is a non-binding process but can be highly effective in resolving conflicts quickly.
Example: If a disagreement arises regarding quality control or delays, the parties may agree to mediation to find a compromise before moving to arbitration or litigation.
Arbitration: A more formal process where a neutral arbitrator renders a binding decision. Arbitration is typically faster and less expensive than litigation.
Example: Disputes over the interpretation of contract terms regarding payment schedules could be referred to arbitration for a quicker resolution.
Partnering and Collaboration
Partnering Agreements: Partnering is a collaborative approach where all project stakeholders commit to working together to achieve project goals and resolve conflicts amicably. This process emphasizes trust, open communication, and cooperation.
Example: The owner, contractor, and key subcontractors meet at the project’s inception to establish a collaborative environment and agree on resolving issues before they escalate into formal disputes.
Team-Building and Relationship Management: Regular team-building exercises and creating an environment of mutual respect and understanding can reduce tension between parties and improve cooperation throughout the project.
Example: Organizing workshops or team-building events where all parties discuss project goals and challenges can foster a sense of shared purpose.
Alternative Dispute Resolution (ADR) Methods
Dispute Review Boards (DRBs): DRBs are panels of neutral experts who provide advisory opinions or binding decisions on disputes as they arise. This process can prevent disputes from escalating and ensure a timely resolution.
Example: A DRB may be set up at the beginning of a large-scale construction project to provide ongoing oversight and address issues during the project lifecycle.
Expert Determination: When specialized knowledge is required, parties may agree to appoint an expert to determine facts or give an opinion on technical aspects of the dispute.
Example: If there is a dispute regarding the quality of materials used, an expert in construction materials may be appointed to assess whether the materials meet contractual specifications.
Litigation (As a Last Resort)
Understanding When to Litigate: Litigation is the formal process of resolving disputes in a court of law. While it is the most adversarial and expensive option, it may be necessary when all other methods fail, or if legal rights need to be enforced.
Example: If a contractor has not been paid for completed work despite multiple attempts to resolve the issue through mediation or arbitration, litigation may be necessary to obtain a court judgment.
Costs and Time: Be aware of the high costs, time, and uncertainty associated with litigation. Ensure the dispute resolution clause in the contract encourages mediation and arbitration first to avoid costly litigation.
Claims Management
Managing claims efficiently can prevent disputes from escalating and ensure project success.
Proactive Claims Prevention
Clear Terms for Claims: Ensure that the contract specifies how claims should be managed, including documentation requirements and timeframes for notifying the other party.
Example: A contract clause may require the contractor to submit a written notice of any delay within 10 business days of occurrence.
Proper Documentation of Claims
Timely Notice: Claims should be documented as soon as they arise, with clear explanations of the issue, supporting evidence (e.g., photos, reports, or emails), and the specific relief being sought.
Example: If there is a delay due to late material delivery, the contractor should provide written evidence of the delay, including supplier communication and tracking details.
Early Resolution of Claims
Dispute Resolution Mechanisms: Include processes such as mediation or arbitration for resolving claims early to prevent escalation into full-blown disputes.
Example: The contractor submits a claim for additional time due to unforeseen site conditions. The owner and contractor resolve the claim through mediation, avoiding project delays.
- Neftaly Malatjie | CEO | SayPro
- Email: info@saypro.online
- Call: + 27 84 313 7407
- Website: www.saypro.online
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