Model for Processing Construction Claims

C.S.Suryawanshi, Former Chief Engineer & Joint Secretary (P.W.D) Senior Consultant Mumbai.

Construction Claims

Introduction

With growing standards, advanced technologies, and owner-desired additions and changes, construction projects are becoming more and more complex, while the successful completion of projects has been thought to depend mainly on cooperation between the contractor, consultant, and owner, problems and disputes have always erupted due to conflicting opinions as to the interpretations, various aspects of design and construction.

With the introduction and widespread application of contemporaneous period method (CPM) of analysis, scheduling, it became easier to point out where the delays are occurring and how delays in one activity affect others, and possibly the project as a whole, thus allowing objective judgments as to whether contractors should be entitled to time extensions. On the other hand, the increased complexity of construction processes, documents, and conditions of contracts has been contributing to higher possibilities of disputes, conflicting interpretations, and adversarial attitudes. The exhausting and expensive process of litigation has not been making things easier, as unsettled claims that have developed into disputes can take a very long time to be resolved. All the above factors have made "claims" an inevitable burden in implementing today's construction projects.

Conditions precedent - conditions which provide that certain obligations under a contract will only come into force if and when specified requirements are met - are of course common in construction contracts. That does not mean, however, that they are not without their problems. A party which falls foul of a condition precedent may lose its right to make a claim, and therefore have no option but to vigorously contest its enforceability.

The courts have consistently shown that they are willing to uphold conditions precedent where they are 'clear and unambiguous'. Only if there is genuine ambiguity over whether such a condition exists will the courts be reluctant to impose one (on the basis that it would deprive the other party of rights which it would otherwise enjoy under the contract). It is also important to note that the courts have repeatedly found that a clause need not be expressly labelled a 'condition precedent' to have the same effect.

NBMCW March 2015

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