Guidelines for Administrating and Drafting Nonpayment Owners' Obligation Provisions under Design-Build Contracts

Abstract

The obligations of the different contracting parties are set forth in most standard forms of contract. Despite that, research has shown that poor contract administration is one of the major causes of disputes in construction projects. The objective of this paper is to present contract administration guidelines for appropriate utilization and administration of the provisions related to owners' nonpayment obligations under design-build contracts. In doing so, the authors (1) analyze the provisions related to the owner's obligations under the most common national and international forms of design-build contract, (2) highlight the differences and commonalities among the analyzed contracts in a summarized form, and (3) present extensive guidelines in a checklist form to assess the parties' understanding of their contract, improve the process of administrating such contracts, and guide them in drafting a new contract when it comes to provisions related to the owner's obligations. This study fills an important gap in the body of knowledge as related to stakeholders' comparative understanding of the different standard design-build contracts. As such, it should promote efficient administration of owners' obligation clauses, thus minimizing disputes and enabling parties to mitigate the related consequences in their projects.