Dispute Resolution in Construction: Strategies and Mechanisms

The assignment focuses on analyzing the implementation and effectiveness of various dispute resolution methods and risk management techniques in construction projects. It highlights the significance of Alternative Dispute Resolution (ADR), including negotiation, mediation, and arbitration, as critical components for addressing conflicts without resorting to litigation. The analysis emphasizes how these mechanisms can lead to more efficient conflict resolution, saving time and resources while maintaining professional relationships. Furthermore, the assignment examines risk management tools such as warranties, which provide a safety net against defects in materials and workmanship, thereby safeguarding the reputation of construction firms and ensuring project longevity. It also discusses how addressing issues like water seepage and M&E system failures through effective warranty claims can prevent long-term damages and additional costs. By incorporating these strategies into contracts, companies can mitigate risks associated with unforeseen circumstances and ensure successful project delivery. The analysis is supported by insights from key texts in the field, including works on construction law principles, dispute resolution processes, and contract management practices.

CONTRACT PRACTICE

TABLE OF CONTENT
PART 1............................................................................................................................................3
1. Importance of role and responsibility of owner.......................................................................3
II. Significance of contract clauses relating to the valuation of variations under the BCA
regulations....................................................................................................................................4
Analysis of various contractual mechanisms that can be used by HDB to resolve the issues.....5
Part 2................................................................................................................................................7
(i) Stating the importance of the knowledge of dispute resolution in both condition.................7
Part 2 (ii) Discussing importance of insurance, bond and warranties in construction project on
a given scenario...........................................................................................................................8
References......................................................................................................................................10

PART 1
1.Importance of role and responsibility of ownertowards designer, contractor and quality
survivor
According to the given case, ABC Ltd has won a place on the framework agreement to
refurbish sixblocks of public housing block for Housing Development Board (HDB). The board
needs to ensure every process of the building construction. With respect to this, roles and
responsibility of the owner will be as follows:
 To decide the scope, program, and budget for the construction of the building before the
design.
 In the design phase, owner monitors every process for knowing the progress and quality
of work. Along with this, it is theduty of HDB to provide all requirements to the designer
(Genn, Greger and Menkel-Meadow, 2014).
 While issuing the construction documents, it is theresponsibility of theowner to confirm
that plans and specifications are sufficient for the contractor to follow and use.
 In case, if the specifications contain any error or mistake than it is theresponsibility of
HDB for the extra cost. So, owner focuses on managing quality and provide this
responsibility to quality survivor.
 In theconstruction phase, the responsibility of HDB is being executed by its agent and
designer. During this period, proper responses on time are given to the contractor with
respect to the information they request, proposed changes and claims (Hoffman, 2014).
 The HDB is taking the decisions regarding the typical construction project. For example,
what tools and technique to be utilized by architect, CPA, real estate broker, engineer,
band officer, etc.
 An important role of decision maker is played by the owner in helping thearchitect to
prepare recommendations regarding the technical matters, quality, cost, time and
necessary corrections.

According to the given case, ABC Ltd has won a place on the framework agreement to
refurbish sixblocks of public housing block for Housing Development Board (HDB). The board
needs to ensure every process of the building construction. With respect to this, roles and
responsibility of the owner will be as follows:
Roles and responsibilities of Quality Surveyor:
His role is to manage and maintain the costs with respect to the construction projects.
Responsibilities are as:
 Coordination of work
 Evaluation of estimate materials, time and labor cost with the help of relevant studies
 Preparation, negotiation and analysis of the costs regarding the tenders and contracts
 Provide appropriate advice on a range of legal or contractual problems
Role and responsibilities of Project Manager:
 Cost and time estimating
 Risk Analysis
 Planning and Sequencing of the activities
 Development of budget
 Proper documentation of all the processes
 Monitoring and reporting
 Planning of resources
Roles and responsibilities of Engineer:
 Designing of project
 To ensure if equipments are properly designed, selected and installed
 To make sure that equipments are working properly as per the requirement
 Monitoring and handling issues if any occurs
Roles and responsibilities of Consultant:
 Project Scheduling
 Quality control and assurance

 To implement safety measures
 Checking of quantities, billing and payment schedule
II. Significance of contract clauses relating to the valuation of variations under the BCA
regulations
The contract clauses which are related to the valuation of the variations are as follows:
Changing Works:
A contract under the valuation of variation does not allow theclient to make changes in
the scope of their work. With respect to the case, under this contract the client,i.e., ABC Ltd is
unable to make avariation in its work or working structure which is provided by the Housing
Development Board (HDB). Under some contract, Architects of Duck Architect Ltd, Structural
Consultants of Jack Engineering Limited, Project Manager, Quantity surveyor and Lighting
Engineer can request for some changes with reference to their work and related areas but can
implement them only on the permission of HDB. Along with this, all the particulars of the
project can claim for the extension of time, where seeks compensation for the extra cost. With
respect to it, thecontractor can be granted the extension of time by the HDB but will not get any
extra charge if it will not ask for financial compensation. The power of accepting or rejecting
changes is in hand of HDB (Keshavjee, 2013).
Variation Payments:
In the area of construction and engineering contract, the contractor gets payments as per
the variations like abill of quantities. In context to this, particulars of the project like Architects,
M&E Consultants, Structural Consultants, etc. can claim for the variation in payment by
providing sufficient documents to the employer of Housing Development Board of Singapore
within a particular period. As per the terms of thecontract, theengineer can have authority to
agree on the variations by involving both assessments of compensation and time extension
(Contract Variations. 2008).
Variations V Claims:
Variations and claims are two different part of thecontract. Any claim regarding the
variation can only make if the employee rejects the application and contractor disagree with the

decision and wants to file a claim. With respect to thecase, variation can occur for changes like
thedesign, cost with respect to refurbish six blocks of thepublic housing block.
Analysis of various contractual mechanisms that can be used by HDB to resolve the issues
As per the given case, HDB can face various contractual issues which are as follows:
 Changes in the work of contract
 Suspension of work
 Variations regarding quantities
 Damage due to occurred natural disasters or force-majeure
 Fluctuation effect with respect to currency
 Possession before the completion
 Acceleration of work progress
 Ripple Effect
 Rise of price due to inflation
 Acceleration of the work (Goldberg and etal., 2014)
 Ambiguity in the area of drawings and specifications
It is necessary for HDB to handle and manage all the above issues properly for ensuring the
building construction and development in the decided time without any disturbance. In case,
above discussed conflicts cannot be resolved by the HDB than contractor or project particulars
have right to claim against them. For handling the problems and accomplishing the objective,
HDB will have to use below described mechanisms:
Negotiation:
It is one of the widely used methods for resolving issues and includes both bilateral and
multilateral processes. This arrangement will lead to afocused discussion on the area of dispute
among the engineers and other particulars of the project with the intention of resolving the
differences without involving any third party. By creating discussion between the parties
peacefully, HDB will able to settle their issues.
Adjudicatory Dispute Resolution:

This method is common and widespread in the construction sector worldwide. The problems can
leave a cascading impact on the project of building torefurbish so to address them, HDB can use
this mechanism. Under this, parties can select from a broad range of dispute resolution
mechanism which consists of Dispute Boards, Expert Determination, Litigation or Arbitration
(Johnson, 2017).
Dispute Board:
Under this, HDB can handle the issues regarding time-sensitivity. Engineers or other particulars
can ask for anextension of time due to work complexity or other reasons, but HDB wants to
complete theproject in thedecidedperiod. The company will have to set a Dispute boardto resolve
such time-related issues. This board leads to perform two essential functions: a) Quick resolution
of the dispute and b) preventing disputes by simple discussions or negotiations. Dispute Board
can help HDB in accomplishing its objective of refurnish building in thedesiredperiod.
Arbitration
HDB can use this mechanism for handling the problems regarding the technical disputes in
its construction project. It can be utilized as efficient, confidential and cheaper way for litigation.
Under this method, HDB can allow its parties a significant degree of flexibility along with
control on the dispute resolution. By offering freedom to select a tribunal with the skill-set and
proper knowledge, thecompany will able to provide appropriate work to the particulars (Khekale
and Futane, 2015).
Expert Determination:
HDB can use this mode for handling the issues ideally suited to variation claims or claims
regarding extra work. Technical experts take decisions concerning to the disputes which cause
during the execution of the contract. This method allows problems to be readily adjudicated in
the first instance for avoiding any delay in the project of construction.
Litigation:
It is the final resolution process which is used for handling the previous procedures which
have failed to achieve the desired results. With the help of this method, HDB can take help of

court for resolving the problem efficiently. In this, thedispute is taken to court in front of ajudge
and includes a complicated process which needs significant resources like legal representation.
The courts follow proper rules, regulations, and legislation for handling the issue and deciding
the appropriate result.
All the above mechanism can help HDB to handle its problem actually and continues the
project execution for completing it in thedesiredperiod.
Part 2
(i) Stating the importance of the knowledge of dispute resolution in both condition
Dispute resolution is basically the process of resolving disputes among various parties
involved in a contract. This term can also be used interchangeably with conflict resolution in
which conflict style could be used in different scenarios (Bacow and Wheeler, 2013). There are
various methods of dispute resolution exist for resolving it like; filing a lawsuit, arbitration,
collaborative law, mediation, conciliation, several types of negotiation and facilitation. Any of
the methods could be used for resolving disputes when arises due to any reason. Moreover, it is
essential to have knowledge of dispute resolution because it helps in many ways when contract is
breached. There are various benefits linked with it so it which a party can reap out when he
contract gets breached by other party for some reason. There are basically two conditions listed
below during which other party to contract dissolve the contract so the firm utilized the dispute
resolution which benefitted the company in many terms. Due to certain knowledge of dispute
resolution, benefitted the firm during the breach of contract during an unforeseen circumstances
(Moffitt and Bordone, 2012).
It is given that ABC Ltd. has been awarded with HDB project for constructing residential
estate of 600 units along with two MSCP. For that purpose, the company signup up with various
contractors for the supplies of raw material for construction, core structural sub-contracts and
architectural sub-contracts and many more. However, due to bad weather in an area delayed the
construction process. Therefore, these parties started disputes with the company for which
company has generous amount of knowledge about dispute resolution process. Moreover, the
foreign employees also tightened to work or invest which is again an unpredictable circumstance
for the firm (Goldberg and et al., 2014). Therefore, the knowledge of dispute resolution
benefitted the company during these situations. Therefore, company already included the point of

dispute resolution clause in the agreement for which company can make utilization of this clause
anytime during the conflict. Furthermore, this will help the company in solving the dispute in an
easier manner because this clause states multiple ways of resolving issue and this will help the
firm in chalking out when, where and who will resolve the dispute. This will further avoid
prolonging any disagreement because resolution process will get start quickly.
In addition to this, this also benefits in avoiding litigation which is the best option
because litigation involves huge waste of time and money. As there are number of ways which
can be utilized for conflict resolving that can be utilized by the parties. Furthermore, this also
involve lesser time so contract can be resumed very quickly (Keršuliene,Zavadskas and Turskis,
2010). Moreover, this rescue the business relations because if litigation is filed up between
parties then it dissolve relations between two parties and they both will never work in future
again. However, in dispute resolution, relations could be saved as it does not involve intense
fight between two parties. Moreover, it saves lot of time and money which get wasted during
court case. The reason is that, dispute gets resolved easily and quickly, however, court case
longer time to resolve and it also discarded the business relations (Lumineau and Malhotra,
2011). Therefore, the knowledge of dispute resolution saved the company during bad weather
and tightening of foreign employees. The company can setup dispute resolution meeting where
both parties can make understand regarding their situation which will help in dissolving the
issues and then ABC Ltd. can restart their project after the bad weather.
Part 2 (ii) Discussing importance of insurance, bond and warranties in construction project on a
given scenario
Construction project involves high amount of risk because of its nature of work.
Unforeseen circumstances can occur at any point of time which may hinder the contract.
Moreover, the company must buy every material required for building a housing society, under a
warranty period so that they could be replaced (Turner, 2014). Moreover, insurance should be
done in case of accident; money can be recovered from the insurance company which will save
money to the company. Furthermore, a bond should be signed with certain parties so that
services could be taken from them whenever required (Lehman, 2013).
Moreover, benefits of insurance in construction project include business risk, safety by
awareness, economic stimulation, planning and peace of mind, health and wellness. Therefore, as

per the case, when accident occurred during the inspection at handover stage, company can make
use of insurance through which medical insurance could be claimed by the firm so that an injured
person could be treated in a good hospital. Along with that, under the insurance for the housing
society, company can do the construction again without spending any more money. Furthermore,
importance of bond includes; financial security and construction assurance (Appleman,
Appleman and Holmes, 2016). As it is known that construction project involve high risk of
money and delaying in project is common due to unforeseen circumstances. Therefore, bond
provides construction assurance. Relating with the case, during the inspection in handover stage,
an accident occur and this can hinder the project completion at final stage. However, bond saved
the company by providing construction assurance and financial aid and using it company
continued its construction (Jervis and Levin, 2008).
In addition to this, warranties in construction project can benefit the company in many
ways. The firm can get the material replaced in case they are not of expected quality. This will
save the money and reputation of the company. By using this reputation, company can get more
projects in future (Tomlinson and Woodward, 2014). As per the given case, after 4 years of
project handover, town council complained about the M&E and water seepage in housing
society. However, the residential estate was covering under the warranty period so the company
replaced the non-working items and also got the seepage re-constructed which helped the firm in
getting done in a quick time and with no use of money. Therefore, it can be concluded that by
using these terms in contract, company can mitigate the risk and get the surety of construction
under any unforeseen circumstances.

References
Journals and Books
Appleman, J.A., Appleman, J. and Holmes, E.M., 2016. Contract Concerns: Reinsurance
Contract Formation, Validity, And Judicial Construction (Vol. 14). Appleman on Insurance Law
and Practice.
Genn, H., Greger, R. and Menkel-Meadow, C., 2014. Regulating dispute resolution: ADR and
access to justice at the crossroads. Bloomsbury Publishing.
Goldberg, S.B. and et al., 2014. Dispute resolution: Negotiation, mediation and other processes.
Wolters Kluwer Law & Business.
Goldberg, S.B., Sander, F.E., Rogers, N.H. and Cole, S.R., 2014. Dispute resolution:
Negotiation, mediation and other processes. Wolters Kluwer Law & Business.
Hoffman, S.J., 2014. Promoting compliance through effective dispute resolution. Routledge
Handbook of Global Health Security, p.239.
Jervis, B.M. and Levin, P., 2008. Construction law, principles and practice. McGraw-Hill
College.
Johnson, P.J., 2017. Effectiveness of dispute resolution mechanisms in natural resource
management in Ontario/by Peter John Johnson.
Keršuliene, V., Zavadskas, E.K. and Turskis, Z., 2010. Selection of rational dispute resolution
method by applying new step‐wise weight assessment ratio analysis (SWARA). Journal of
business economics and management, 11(2), pp.243-258.
Keshavjee, M., 2013. Islam, sharia and alternative dispute resolution: Mechanisms for legal
redress in the Muslim community (Vol. 6). IB Tauris.
Khekale, C. and Futane, N., 2015. Management of Claims and Disputes in Construction
Industry. International Journal of Science and Research (IJSR), 5(5).
Lumineau, F. and Malhotra, D., 2011. Shadow of the contract: How contract structure shapes
interfirm dispute resolution. Strategic Management Journal, 32(5), pp.532-555.
Moffitt, M.L. and Bordone, R.C., 2012. The handbook of dispute resolution. John Wiley & Sons.
Negi, C., 2015. Concept Online Dispute Resolution in India.
Tomlinson, M. and Woodward, J., 2014. Pile design and construction practice. CRC Press.
Turner, D.F., 2014. Design and build contract practice. Routledge.
Online

Contract Variations. 2008. [Online]. Available Through:
<http://www.constructionweekonline.com/article-3156-contract-variations/>. [Accessed on 21st
September 2017]
Lehman, A., 2013. Construction Basics: Construction Contract Warranties. [Online]. Available
through < https://www.americanbar.org/publications/under_construction/2013/august_2013/
construction_basics.html>. [Accessed on 21st September, 2017].