Some aspects of building contract disputes

Thesis (MBldg) -- University of Melbourne, Faculty of Architecture Building and Town & Regional Planning, 1976.Building construction ranks in second place amongst the secondary industries in Australia. Disputes on contractual matters between the principal or associated parties are an added indirect charge to the costs of building projects and would reduce their overall efficiency. The major aims of the thesis have been to investigate the areas of building contracts where disputes occur and to analyse the causes of the disputes. Associated aims have been concerned with determining allied factors influencing the generation of disputes and information linked with the settlement of disputes. Costs related to the values of the disputed items and the negotiating time for the parties have been investigated. The usefulness of standard forms of contract has been examined and a further aim has concerned the means to improve contractual relations. Due to the wide range of contracts within the sphere of building activity the subject has needed considerable limitation. It has been restricted to building projects in Australia of a private nature, excluding houses and flats, using the standard contract form as agreed between the architect and builder institutions, to disputes between owners and builders or any of the associated parties, and the disputes to have been an extended difference of opinion. The initial review of the subject matter has come from British and Australian sources. A comparison of the British and Australian architect sponsored forms was made to assess the relevance of British comment. Personal contact was made with representatives of the associations of the principal parties From the collected information a preliminary assessment was made of the causes and importance of the various factors causing building contract disputes. Using the background knowledge a survey questionnaire was devised to allow for the receipt of opinions on matters of a general nature concerned with contracts and disputes and for specific disputes encountered by the respondents. The information came from a representative selection of varying size organisations, projects, building types and project costs. The results of over 1,600 replies were analysed and conclusions reached as to the areas where disputes occur,their relative importance and the predominant causes for the disputes. Factors contributing to disputes were also isolated. The results of the minor aims of the thesis gave information on the expectation for success by the disputing parties, that relatively few disputes are not negotiated directly by the parties, the average value of disputed items, the need for a single standard form for all public and private building work in Australia and average costs for the negotiating of disputes. The impact of disputes on the construction time and cost was determined. Arising out of the results of the survey and the subsequent analysis, observations have been made concerning possible modifications to the normal contract conditions in dispute producing areas, the inclusion of further basic components to contract conditions and variations from the contract system of competitive or selected tenders on documents independently prepared. It has been shown that variations to building contract agreements predominate as a dispute producing factor and that a transfer of more responsibilities to the owner by a direct involvement in the constructional management could remove some dispute elements and ease the strains associated with organising and administering of building projects