Contract Management and Disputes in the Construction Industry

Abstract

The construction industry is an important business area where multidisciplinary efforts are performed under a complex structure. It provides the majority of national income for a country’s economy. Because of its complex structure, planning, organization and definition of the parties should be conducted properly. Contracts are legal documents that bind parties and define their rights, authorizations and responsibilities. They regulate the relationship between the parties from the design until the completion of the project. In order for projects to meet the target schedule, budget and quality, contracts should be comprehensive to provide clarification to various aspects. For avoiding misinterpretations and contradictions, they need to be written in an open, clear and comprehensible language. Deficiencies and lack of detail cause disagreements between the parties. For the success of a project, site performance is as important as the contract. Contract administration, through timely interference with deficiencies and errors, avoids divergences from project targets such as schedule and budget. This study, through literature review, focuses on the concept of the construction contract, project and contract administration, the importance of construction contracts and the disputes between the parties. It aims to provide information to persons, companies and institutions interested in the subject.

Keywords: Construction contracts, Contract management, Project management, Dispute

DOI: 10.7176/JSTR/5-11-09