A paper presented to a TUNS/Revay seminar in 1990.
It has been modified only to suit a web presentation format.

Published here September, 2001.

Introduction | Claim Avoidance | Claim Identification | Sources of Dispute
Claim Notification | Reserving Rights | Record Keeping | Typical Set of Records
Focus on the Last Two Groups | Managing the Records | Useful Tips

Claim Avoidance

More formally, a contractor's claim may be defined as:

A legitimate request for additional compensation (cost and/or time) on account of a change in the terms of the contract

It follows from this definition that a claim may arise under any form of construction contract, except perhaps those very rare kind, in which all costs are fully reimbursable without any reservations at all. Of course, a claim is most likely to arise under a fixed price form of contract, and in fact today there are few such contracts in which there are no claims, negotiations and settlements before the contract is finally closed out.

It also follows that it is essential to know exactly what is expected of the contractor under the terms of the contract, both before signing (indeed at the time of bidding), as well as during its execution.

This knowledge must not just be limited to senior management at the home office. Site supervisors who deal with the day-to-day work must be equally well informed. Strictly speaking, every article and requirement of the contract must be clearly understood, if the contents of the contract are to be faithfully carried out.

It is a matter for great regret, therefore, that some contracts are written by lawyers in such a way that only other lawyers can understand them.  And even then they do not always agree! So what chances have the owner and contractor in understanding their respective obligations in such contractual relationships? But that is another story!

Fortunately, the increasing use of standard documents and specifications has gone a long way to facilitate the expression of requirements, and thereby avoid disputes through simply misinterpretation. So three simple rules can be promulgated to avoid making claims:

  1. Know exactly what the contract requires
  2. Do what the contract requires, but without interference
  3. Don't do anything else, without proper documentation
Introduction  Introduction

Home | Issacons | PM Glossary | Papers & Books | Max's Musings
Guest Articles | Contact Info | Top of Page