Construction Claims and Disputes: Causes and Cost/Time Overruns

Abstract

Avoiding construction claims and disputes requires understanding of the contractual terms, early nonadversarial communication, and understanding of the causes of claims. The present paper addresses the latter issue by presenting the results of a pilot study undertaken by the University of Calgary and Revay and Associates Ltd. This paper examines, among other things, the causes of claims, delays, and cost overruns on 24 projects in Western Canada. Projects investigated in this study included civil, institutional, high‐rise apartment building, and petrochemical. To identify some of the critical elements in construction contracts, the investigative process also included determining the causes of claims, categories of compensation for claims, and contract clauses quoted in claims. Results of this pilot study indicated that critical elements in construction contracts relate to changes/ extras, disputes, soil/site conditions, and delay. It is the writers' opinion that special attention to factors identified in this study will help industry practitioners in minimizing the risk of contract disputes. Further, the present paper also suggests several essential steps an owner can take to minimize risks.