REASONS FOR CLAIMS IN CONSTRUCTION CONTRACTS


REASONS FOR CLAIMS IN CONSTRUCTION CONTRACTS
  • Due to an unbalanced contract.
  • Due to causes for which owner/ employer is responsible.
  • Due to causes for which contractor is responsible.
  • Due to causes beyond the control of both sides.

DUE TO AN UNBALANCED CONTRACT

  • Basic structure of contract is in favor of client and loaded against the contractor.
  • Risk is unilaterally transferred to one side.
  • Absence of Neutralization mechanism.
  • Progress of project is not the basis of contract.

DUE TO CAUSES FOR WHICH OWNER/ EMPLOYER IS RESPONSIBLE

  • Poor site investigation by the owner at the pre-tender stage.
  • Delay in acquisition of land and delay in handing over the site to contractors in time, including non-availability of sufficient work-fronts during the execution of the project.
  • Delay in issue of drawings by the owner.
  • Delay in issue of owner issue materials by the client.
  • Delay in releasing payments leading to cash-flow problems to the contractors.
  • Organizational problems of the owner.
  • Non co-operation from the owner/project authorities due to poor earnestness in the public owner system.
  • Co-ordination and managerial problems of the owner.
  • Deviations on the agreed terms and conditions of the agreements by the owner or non-fulfillment of contractual obligations.
  • Delay in settlement of rates for extra items, additional items and revision of rates.
  • Poor quantity surveying by the owner at the time of tender and heavy increase in the quantum/scope of work.
  • Delay in settlement of claims.
  • Delay in arbitration proceedings during the execution of  project.
  • Forcing the contractor to appoint a particular sub contractor for certain specific works.
  • Delay in completion of earlier stage contracts and hence a delay in handing over the site.
  • Paucity of funds with the owner, leading to non-payment of bills and dues which leads to cash-flow problems for the contractor.
  • Delay in giving decisions other than above by the owner.

DUE TO CAUSES FOR WHICH CONTRACTOR IS RESPONSIBLE

  • Poor rates quoted for a few or several or all items.
  • Managerial problems of the contractor.
  • Strikes, militancy of the labour, and other labour related problems in the contractor’s organization.
  • Lockout by contractors.
  • Delay in mobilizing the required resources in time.
  • Due to Causes beyond the control of both sides
  • Force majeure conditions like heavy rains, floods, snow, landslides, earthquake,
  • Political problems, riots, bandhs, etc.
  • Health hazards and non-availability of medical facilities.
  • Engineering and technical problems not previously understood.
  • Inter-state disputes.
  • Obstruction by mafia-gangs.
  • Law and order problems
  • Local problems, obstruction by local population and not employment from the owner or the contractor.
  • Non – availability of construction materials (cement, steel pipes, CGI sheets) in the market.
  • Non-availability of appropriate and adequate labour.
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