Image source: google
The construction industry is a complex and competitive environment in which participants with different views, talents and levels of knowledge of the construction process work together. In the uncertain, complex, multiparty, and dynamic environment of construction projects, on-schedule project completion is difficult to achieve and hence the industry is always open to disputes and claims.
“A claim is a request, demand, or assertion of rights by a seller against a buyer, or vice versa, for consideration, compensation, or payment under the terms of legally binding contract, such as for a disputed change” (Project Management Institute, 2013)
Claims have negative impacts on project and become an inevitable burden to the industry. Management of claims is one of the biggest challenges in current changing international construction industry.The primary objective of claim management is to solve the issues effectively without going into arbitration or litigation.
If these claims are not managed clearly; it gives rise to a disagreement or argument over the validity or quantum of a claim known as disputes. Construction disputes arise because of disagreements between the parties on a contract. They are due to a perceived or real violation of a construction contract and the obligations set forth . A combination of environmental and behavioral factors can lead to construction disputes.
Implementation of sound contract documents can increase control, increase effectiveness and reduce cost and also provide strategic and competitive advantage. Good preparation of the right contract is most essential factor for good contract administration.
Restructuring of contract conditions to minimize the claims is key essence of this course along with study of claims & disputes.