Construction Law Report: Alliance Contracts and Traditional Contracts

This report delves into construction law, focusing on the examination and comparison of alliance contracts with traditional contracts. It begins with an overview of construction law, its inherent risks, and the importance of its proper implementation. The report then contrasts alliance contracts, which facilitate collaboration and risk-sharing, with traditional contracts. It identifies circumstances where alliance contracts are best suited, such as large-scale projects with high budgets and significant risks, and highlights factors contributing to their success. Furthermore, the report provides a critical analysis of alliance contracts, outlining their advantages, such as enhanced transparency and collaborative decision-making, alongside disadvantages, such as potential inflexibility and resource reliability concerns. Through case examples, the report illustrates the practical application and effectiveness of alliance contracts in managing construction projects. The document is contributed by a student to be published on the website Desklib. Desklib is a platform which provides all the necessary AI based study tools for students.

Running Head: CONSTRUCTION LAW
CONSTRUCTION LAW

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Table of Contents
Introduction................................................................................................................................3
Examination of construction law...............................................................................................3
Comparison of alliance contract with traditional contract.........................................................3
Identification of circumstances when alliance contracts are used..............................................4
Critical analysis of alliance contact............................................................................................5
Conclusion..................................................................................................................................6
Reference list..............................................................................................................................7

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Introduction
Construction law is elucidated as a branch of law that deals with the matters relating to
construction, building and engineering. The purpose of the study is to examine wide aspects
of construction law for the proper implication of law in different areas. The research shed
light on the wide concept of alliance contract along with its significance to extract a positive
result. Apart from this, a comparison of contract law with traditional law has also been
evaluated to ensure that maximum benefit can be gathered positively.
Examination of construction law
The construction law is the compliance of all issues and law related to building and
construction. It involves all legal issues in context to construction activities that can arise
under state and federal such as employment laws and workplace safety regulation. The
business of construction embraces some inherent risks such as commercial risks, technical
risks and environmental risks (Nra.co.za, 2019). Through proper implementation of
construction law, the potential risks and challenges can be minimized positively. In order to
understand the importance of construction law, a case example has been taken that is Apache
Oil Australia Pty Ltd v Santos Offshore Pty Ltd [2016] (Mondaq.com, 2019). According to
this case study, it has been evident that the western Australian supreme court has narrowly
interpreted a joint venture agreement so that limits sought can be minimized that are imposed
on construction activities.
Comparison of alliance contract with traditional contract
Alliance contract is referred to a form of infrastructure procurement where government
collaborates with s private agencies or sector to procure capital assets. Through this contract,
it is easy to share potential risks, challenges and opportunities that upsurge the reliability of
construction positively. The traditional contract has been founded with an aim to compile the
traditional role of seller and buyer for extracting the better result. Through critical analysis of
contract law, there is a range of differences with a traditional contract in terms of feasibility
and reliability. One of the major differences between an alliance contract and the traditional
contract is that it offers a range of approaches to commence a task by emphasizing alliancing
pioneer and project management culture positively (Procurepoint.nsw.gov.au, 2019). On

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another hand, it also helps in establishing a procurement strategy within construction that
reduced the adverse effect of potential risks by encouraging additional value to the client
through shared opportunities positively. The difference of alliance contract with a traditional
contract can be understood through a case example that is Northern Gateway Toll Road
(NGTR) in New Zealand (Nap.edu, 2019). As per the case study, it has been found that about
300 people were worked under this project with an estimated budget of 365 million dollars.
Through the evaluation of this case study, it has been evident that there is a number of
potential risks and constraints that create an alliance contract best fit for procurement model.
By implementing an alliance contract, a firm contract pricing has been amended which is a
type of all alliance contract. Hence, it can clearly be asserted that commencing a project in
constraint budget and a range of problems cannot be possible through traditional contract.
Identification of circumstances when alliance contracts are used
Alliance contracting is one of the effective ways of delivering major capital assets when the
owner works collaboratively with non-owner participants. It is popularly used in a big project
with high estimated budget and risk to ensure that maximum benefit can be gathered
positively.

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Figure 1: Alliance success factors
(Sources: Infrastructure.gov.au, 2019)
Through this contract, It is easy to control or minimize risks at a significant level to extract
maximum benefit without compensating with quality and reliability of the contract. With the
help of this procedure, the decision-making process gets automatically increased by
compliance with new and innovative techniques that increase the feasibility of alliance
contracting (Nap.edu, 2019). On another hand, the major success factors of alliance
contracting are an integrated collaborative team, project solution, the agreed target outturn
cost (TOC) and agreed commercial arrangements. On the contrary, it has also been witnessed
that alliance contract is majorly used to capitalize on the relationship between removes
organizational factors, participants, and encourage integration with the owner effectively.
Critical analysis of alliance contact
Advantage of alliance contact The disadvantage of alliance contact
Alliance contract creates a better opportunity
between an owner and non-owner participant
in building sharing risk and challenges that
enhance the reliability and feasibility of c
construction positively.
The alliance c contract may be unresponsive
to change and developed solution once the
agreement gets set up positively.
It is an effective way to build long term
relationship with the third party by building
no blame culture.
It did not raise any obligation if there is any
better deal then there is nothing to stop
another party to grab the better opportunity.
Through the implementation of an alliance
contract, it is easy to increase transparency
by managing all the documents and reporting
the entire stakeholder related to project.
Under this contract, there is no guarantee of
commencing a business that increased the
vulnerability of investing money positively.
It is considered as one of the best tools for
the unanimous decision-making process to
ensure that maximum benefit can be gathered
positively.
One of the major disadvantages of alliance
contract is the reliability of resources that
may reduce the feasibility of construction
positively.
Table 1: Advantage and disadvantage of an alliance contract

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(Source; Created by researcher)
Conclusion
The entire research signifies wide aspects of contract law along with alliance contract.
Through critical analysis of the alliance contract, it has been identified that the adverse effect
of potential risks can be positively reduced by sharing opportunities and challenges with
partners equally. On the contrary, it does not raise any obligation under this contract that may
reduce the reliability of construction gradually. Through proper implementation of
construction law, the potential risks and challenges can be minimized positively. The major
difference between alliance contract and a traditional contract is that it offers a range of
approaches to commence a task by emphasizing alliancing pioneer and project management
culture positively. Therefore, it can be said that the alliance contract can be an effective way
to commence a task and contract by building a firm relationship with another partner
positively.

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Reference list
Infrastructure.gov.au, (2019), Alliance Contract, Retrieved From:
https://www.infrastructure.gov.au/infrastructure/ngpd/files/National_Guide_to_Allian
ce_Contracting.pdf [Retrieved on 4 May 2019]
Mondaq.com (2019), Alliance Contract, Retrieved From:
http://www.mondaq.com/australia/x/603316/Building+Construction/Projects+Dispute
s+In+Australia+Recent+Cases [Retrieved on 4 May 2019]
Nap.edu (2019), Alliance Contract, Retrieved From:
https://www.nap.edu/read/22202/chapter/4#16 [Retrieved on 4 May 2019]
Nra.co.za (2019), Alliance Contract, Retrieved From: https://www.nra.co.za/content/Alliance
%20contracts%20in%20Australia.pdf [Retrieved on 4 May 2019]
Procurepoint.nsw.gov.au (2019), Alliance Contract, Retrieved From:
https://www.procurepoint.nsw.gov.au/before-you-buy/construction/alliance-
contracting [Retrieved on 4 May 2019]