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There are several types of claims that occur during a lifecycle of a construction project. Typically, these claims can be classified into three main categories:
Nearly, every construction project encounters change. A change can either be a revision of specifications, impact to the means and methods of performing work, more adequacies to the design or so on (Shah, Bhatt, & Bhavsar, 2014). These changes can have a different impact on the project from different stakeholder’s prospect.
From a contractor’s point of view, these changes delay and disrupt the workflow and intended schedule of the project. Since, changes increase and decrease the quality of the project contractor requires increased rates or extra money for completing the work. In this condition, a possibility of a claim arises between the contractor and client. In addition to this, change orders typically request for more adequacy in the design, whether it be by owner or the contractor. This provokes a defensive nature for design engineers causing more disputes.
Moreover, change also refers to any additional work required by the owner after the construction has started. Since, this extra work was not originally included in the contract. The contractor claims that there is a change in contract. While the owner believes that it was originally a part of the contract. This disagreement also leads to a clause between owner and contractor (Shah, Bhatt, & Bhavsar, 2014).
In almost every project, the nature and condition of the physical aspects and site is briefly described in the contract documents. However, in some cases those site conditions fail to meet with the written description. Because of these changed conditions, workflow of the project gets disrupted along with a risk of increased cost and timeframe. In such situations, a claim becomes inevitable between the owner and contractor. Besides this, situations also arise where contractor is encountered with unknown physical site conditions, of an unusual nature. Such as, a rock that was supposed to fracture did not fracture as expected or unusual moisture conditions of soil.
In construction industry, most frequently occurring claims arise due to the delays and disruptions of the intended schedule (Shah, Bhatt, & Bhavsar, 2014). According to Gibson, extension of time submissions are the most common source of construction disputes (Gibson, 2008). Delay claims refers to the unforeseen circumstances which extend the planned duration of the project. These delays can be caused by the contractor, the owner, third parties, or by unanticipated natural or artificial site conditions. One this basis, delay claims can be classified as excusable and non-excusable delays.
Excusable delays are those where the contractor is not held accountable for delay. These delays arise from unexpected circumstances that are beyond the control and include no fault or negligence of the contractor such as design problems, unforeseen severe weather, unexpected strikes etc. On the other hand, non-excusable delays are those where the contractor can be held accountable. In this case, the circumstances occurred are foreseeable and can be managed regardless of the fact that the contractor has control over the occurrence or not. For this, contractor is required to efficiently plan the project considering the unavoidable circumstances. If not, then the contractor can be held accountable.
In addition to this, there are many potential disruptive events that have an impact on the planned sequence of the project. For example, the owner fails to provide whole site access to contractor, obtain permits and right-of-ways, or fails to coordinate work with other contractors.
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