Construction projects, in particular deep foundation projects, are commonly complex and risk-prone. Extensive rework is often required to revise designs and construction methods, invoking variations clauses in contract documents, which can result in disputes, time delays and cost overruns. Conservative clients often draw up one-sided or rigid contract documents, which increases the chance of disputes and delays. Instead of logical risk allocation, passing on risk becomes the contractual motto.
Several types of balanced construction contract formats are available today. While FIDIC type of formats are being chosen by more progressive clients, the emphasis is still on client-centric models by commonly loading the ‘particular conditions’ in the client’s favour. Even where alternative dispute resolution systems such as reconciliation negotiations, arbitration, mediation and mini trials are available, they are invoked only after disputes arise. There is also considerable recourse to arbitration and time-consuming judicial interventions, militating against mutually beneficial approaches. Often, contracts are based on basic distrust rather than collaboration.
