Claims And Claims Avoidance Construction Essay


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Claims have proven to be unavoidable in the United Kingdom's construction industry. Claims culture has since been seen to be an industry within an industry (Thomas R, 2001). Construction claims was defined by Chappell D (1998) as "the ascertation of right to an extension of the contract period and/or to a payment arising under the ordinary contract provisions for payment of the value of the workClaims are based on express or implied provision of the contract and for it to be successful it must relate to a contract clause and be supported by relevant documents .It normally occurs in two stages:

With the current state of the economic climate where profit margins have dwindled, claims have unfortunately become the last result of reclaiming some profit by most construction companies in the U.K. Complexity of work and formal relationship of parties involved are also reasons behind the increase in claims. This new claims culture tends to prevent against normal negotiation practice (Uff and Odms de Zylva, 1998).

According to Alan Turner (1997)"construction contracts have been produced to suit the procurement methods required and in so doing they place the balance of responsibility, reward and risk accordingly on the parties to the contract". It could be further classified according to two fundamentals these are; according to responsibility and according to reward allocation..

Standard form of contract should always be selected because it provides a more "fair contract condition" scenario Therefore the client needs to provide clarity on the conditions regarding reimbursable unforeseen events. Contract conditions in general are the most important documents in a project because it illustrates the obligations of parties which is well defined could reduce claims.

Contractors are required to institute good recordkeeping policies and measures that suit their legal obligations. Contractors should uphold a record keeping system that perfectly follows and examines project activities. This should be reflected in their procurement policy. Record keeping could be done on a daily, weekly or monthly base but most importantly it should be an on going event.

Claims should be made after serious consideration, in a proper and objective manner, on exactly what contractual grounds, how much money is being asked for and how that sum is established, and the resultant time extension to the contract, if suitable. Claims could be avoided but not eliminated and monitoring systems should be implemented to identify issues that could become claims in future.

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