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Legal Risk Management - PDF

   

Added on  2021-05-31

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Running head: LEGAL RISK MANAGEMENTLEGAL RISK MANAGEMENTName of the StudentName of the UniversityAuthor Note

2LEGAL RISK MANAGEMENTExecutive SummaryThe purpose of this report is to enumerate the inherent risks involved in a construction project ofthe magnitude of Victoria Desalination Plant (VPD). The report also recommends adequatecontrol measures for each of these risks and identifies the parties best equipped to deal with theserisks. The report then goes on to recommend two appropriate dispute resolution methods whichcould be used in case of a dispute arising from such a contract and demonstrates the advantagesof each over a traditional court procedure. Finally the report recommends ways in which thecontract can be managed efficiently and effectively.

3LEGAL RISK MANAGEMENTLegal Risk ManagementInherent risks in the Pre-construction Phase:Delay in Transportation of MaterialsThe Victoria Desalination Plant (VPD) is one of the largest construction projectsundertaken within the Australian commonwealth. In case of such a large construction project allrequired materials must be present on site before the commencement of the construction project.Projects of this magnitude have a strict schedule and an increase in the time taken to completesuch a project would amount to additional costs incurred with each extra day that is taken. This ismainly due to the workforce and the employed machinery which are procured on daily wage/rentbasis respectively. Materials that will be required for the construction process are procured onbulk from sellers who could be from any part of the globe, depending on the needs of the project,and thus the project must take into account the transportation time when formulating a structuraltimeline for the project (Hughes, Champion and Murdoch 2015). However, whether the materialsare being transported by roads or through seas both have their own chances of being delayed inunforeseeable ways. This could be due to the weather conditions or malfunctioning machineryand various other reasons. Exercisable controlIn case of such a risk the best mode of control available to the organization buying thematerial is to ensure that such delays are specifically indemnified by the parties supplying thematerials (Burr 2016). This can be achieved through an explicit contract to the same effectbetween the suppliers and the buyers.

4LEGAL RISK MANAGEMENTRisk of Erroneous DesignsConstruction projects are undertaken based on tenders which are granted to construct therequired structures based on plans and designs formulated by architects. The architects are thusthe ones responsible for calculating stable dimensions for the project and are responsible fordesigning the structure to be built. The chance for human error exists in all such projects and thearchitect may omit to account for a particular piece of the structure or may miscalculate thedimensions or the materials required in a particular project (Dorter, John and Sharkey 2015). Insuch a case the plans would have to be redesigned with the adequate error corrections requiredand this would be an immense waste of time during the pre-construction project.Control measureThe architects hired for making such a project must be hired on the basis of credibility. Acredible firm that has a decent amount of goodwill in the market can be inferred to employcompetent individuals and thus would ideally not produce work with such errors (Ter Haar,Laney and Levine 2016). Although the chance of human error cannot be completely eliminatedthis measure would minimize such a risk to the extent possible.Inherent risks in the construction Phase:Interrupted constructionA construction project is subject to numerous legal compliances and must also considerthe risk of interruption caused by adjacent dwellings or surrounding construction sites. In case ofa construction site that has commenced work without complying with any statutory provision itwould be delayed as the work would ideally be stopped till such compliance has been made.Further, surrounding buildings could also make complaints against such construction due to the

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