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Contract management in construction is not just about ensuring that work is done according to the agreed terms; it also involves handling disputes and claims efficiently. Here’s a detailed guide on how to manage these aspects effectively, explained in plain UK English with examples.
The first step in managing disputes and claims is to fully understand the terms of the contract. This includes the scope of work, deadlines, payment terms, and any clauses related to disputes and claims.
Example: If the contract includes a clause for "force majeure," which covers unforeseeable events that might delay the project, make sure you understand what qualifies as a force majeure event and the procedure for claiming it.
Maintain comprehensive records of all communications, changes, and occurrences related to the project. This documentation is crucial when handling disputes or claims as it provides evidence to support your case.
Example: Keep a log of all project changes, including requests for extra work and corresponding approvals. If a dispute arises about additional costs, these records can help justify your claims.
Most construction contracts include a dispute resolution procedure. This typically involves steps like negotiation, mediation, and possibly arbitration. Follow these steps carefully to resolve issues without escalating them to litigation.
Example: If there’s a disagreement over the quality of work, start by discussing the issue with the contractor directly. If this doesn’t resolve the issue, move to mediation where a neutral third party can help facilitate a resolution.
When a claim is necessary, such as for additional time or costs, submit it as soon as possible. Delays in making claims can lead to complications or even denial of the claim.
Example: If unexpected ground conditions lead to extra work and costs, submit your claim with a detailed explanation and supporting documentation immediately. The sooner you act, the better your chances of a successful resolution.
When negotiating settlements, aim for a fair resolution that addresses both parties' concerns. This often involves compromise and understanding each party’s position.
Example: If a subcontractor claims additional payment for work outside the original scope, negotiate a settlement that considers both the validity of the claim and your budget constraints. A fair compromise can prevent further disputes.
For complex disputes or substantial claims, it may be necessary to seek legal advice. Lawyers who specialise in construction contracts can provide guidance and help navigate legal processes.
Example: If a major dispute arises that could potentially lead to court action, consult a construction lawyer to understand your legal position and options. They can help prepare necessary documents and represent your interests.
Use disputes and claims as learning opportunities to improve future contract management. Analyse what went wrong and how similar issues can be avoided in the future.
Example: If a claim was denied due to inadequate documentation, implement stricter procedures for recording project changes and communications to prevent similar issues in future projects.
Tue Aug 6, 2024
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