Major Barriers to Risk Allocation in Construction Contracts
12 Pages Posted: 10 Feb 2020
Date Written: January 16, 2020
Contracts are a vital tool in the projects for many justifications and it gains this level of importance as it represents the most powerful tool that enforces any decision. We will not exaggerate if we said that the contact is the gate of all project management processes. They define the various aspects, obligations, and relations between each party that are necessary to reach a common planed goal.
Therefore, the contract shall be well-drafted to allocate risk properly and clearly which is the main purpose of the contract. Fair allocation of risk supports reaching a better level of project control which will result in optimum project cost and finish with contractual duration, quality, and the other constraints.
There are several studies and surveys were conducted on risk allocation to reach the criteria of allocation and the influence of the allocation, however; risk allocation faces many barriers that came from the project parties themselves and their infrastructure. These barriers shall be defined well in order to overcome it and finally allocate the risk properly. The contractual parties shall do this identification and collaborate as long as the process of risk allocation is active.
This paper aims to determine the major barrier of risk allocation and provide an assessment to rank these barriers based on a conducted questionnaire.
Keywords: Contract, Management, construction, risk barriers, Contractual awareness, Negotiation, Risk appetite, risk allocation
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